Hwa Tai Report

S
T
N
C
Notice of Annual General Meeting 2

Statement Accompanying Notice of Annual General Meeting 3
Corporate Information 4
Profile of the Board of Directors 5
Audit Committee Report 7
Statement of Corporate Governance 11
Statement on Risk Management and Internal Control 15
Directors Responsibility Statement and Other Information 17
Chairmans Statement 19
Directors Report 21
Consolidated Statements of Financial Position 25
Statements of Profit or Loss and Other Comprehensive Income 26
Statements of Changes in Equity 27
Statements of Cash Flows 28
Notes to the Financial Statements 31
Supplementary Information on the Breakdown of Realised and Unrealised Profits or Losses 82
Statement by Directors / Statutory Declaration 83
Independent Auditors Report 84
Analysis of Shareholdings 86
List of Group Properties 88
Form of Proxy Enclosed
Notice of
Annual General Meeting
NOTICE IS HEREBY GIVEN that the Fortieth Annual General Meeting of the Company will be held at The Hwa Tai
Grand Conference Room, Ground Floor, No. 12, Jalan Jorak, Kawasan Perindustrian Tongkang Pecah, 83010 Batu
Pahat, Johor Darul Takzim, Malaysia on Saturday, 20 June 2015 at 11.30 a.m.
AGENDA
1.
To present the Audited Financial Statements for the financial year ended 31 December 2014 together with the
Directors and Auditors Reports thereon.
2.
To approve payment of Directors fee for the financial year ended 31 December 2014.
3.
To re-appoint the Director, YBhg. Col. (Rtd.) Dato Ir. Cheng Wah, who retires in accordance with Section 129(6)
of the Companies Act, 1965.
4.
To re-elect the Director, Mr. Soo Chung Yee, who retires in accordance with the Companys Articles of Association.
5.
To re-elect the following Directors, who each had served as an Independent Non-Executive Director of the Company
for a cumulative term of more than nine (9) years, to continue to act as Independent Non-Executive Directors of
the Company in accordance with the Malaysian Code on Corporate Governance 2012:YBhg. Col. (Rtd.) Dato Ir. Cheng Wah
En. Mohamed Razif Bin Tan Sri Abdul Aziz
Mr. Soo Wei Chian
6.
To appoint Auditors and authorise the Directors to fix their remuneration.
7.
To transact any other business appropriate to an Annual General Meeting, for which due notice shall have been
given in accordance with the Companys Articles of Association and/or the Companies Act, 1965.
8.
As SPECIAL BUSINESS, to consider and, if thought fit, pass the following resolution:-
ORDINARY RESOLUTION - AUTHORITY TO ALLOT AND ISSUE SHARES IN GENERAL PURSUANT TO SECTION
132D OF THE COMPANIES ACT, 1965
That, subject to the Companies Act, 1965 and the Articles of Association of the Company and approvals from
the Securities Commission and Bursa Malaysia Securities Berhad and other relevant governmental or regulatory
authorities, the Directors be and are hereby empowered pursuant to Section 132D of the Companies Act, 1965
to allot and issue shares in the capital of the Company from time to time upon such terms and conditions and
for such purposes as the Directors may in their discretion deem fit provided that the aggregate number of shares
issued pursuant to this resolution does not exceed 10% of the issued share capital of the Company for the time
being and that such authority shall continue in force until the conclusion of the next Annual General Meeting of
the Company.
By Order of the Board

JESSICA CHIN TENG LI (MAICSA 7003181)
Company Secretary
Johor Darul Takzim, Malaysia
28 May 2015
HWA TAI INDUSTRIES BERHAD I Annual Report 2014
Notice of
Annual General Meeting (contd)
NOTES:
Entitlement to Attend and Proxy
A member entitled to attend and vote at the Meeting is entitled to appoint at least 1 proxy to attend and vote instead of
him/her. Where a member is an authorised nominee as defined under the Securities Industry (Central Depositories) Act
1991, it may appoint at least 1 proxy in respect of each securities account it holds with ordinary shares of the Company
standing to the credit of the said securities account. A proxy need not be a member of the Company. The instrument
appointing a proxy must be deposited at the Registered Office of the Company at No. 12, Jalan Jorak, Kawasan
Perindustrian Tongkang Pecah, 83010 Batu Pahat, Johor Darul Takzim, Malaysia, not less than 48 hours before the
time appointed for holding the Meeting.
For the purpose of determining a member who shall be entitled to attend the Meeting, the Company shall be requesting
Bursa Malaysia Depository Sdn. Bhd. in accordance with Article 49(B) of the Companys Articles of Association and
Section 34(1) of the Securities Industry (Central Depositories) Act 1991, to issue a Record of Depositors as at 15 June
2015. Only a depositor whose name appears on the Record of Depositors as at 15 June 2015 shall be entitled to attend
the Meeting or appoint proxies to attend and vote on his/her behalf.
Audited Financial Statements
Item 1 of the Agenda is meant for discussion only, as the provision of Section 169(1) of the Companies Act, 1965
requires the Directors to only lay before the Company at its annual general meeting its annual financial statements and
thus, does not require a formal approval of the Shareholders for the audited financial statement. Hence, this item of the
Agenda is not put forward for voting.
Directors Fee
The details of the proposed Directors Fee for the financial year ended 31 December 2014 are set out in Note 16(a) of
the Audited Financial Statements for the financial year ended 31 December 2014.
Auditors
The Auditors, Messrs. Baker Tilly Monteiro Heng, have expressed their willingness to continue in office.
Ordinary Resolution Authority to the Directors to issue and allot shares pursuant to Section 132D of the
Companies Act, 1965
The proposed Ordinary Resolution on Authority to the Directors to issue and allot shares pursuant to Section 132D of the
Companies Act, 1965, if passed, will give a renewed mandate to the Directors of the Company with full power to issue
shares in the Company up to an amount not exceeding in total 10% of the issued share capital of the Company for such
purposes as the Directors consider would be in the interest of the Company. This would enable the Directors to take swift
action in case of a need for any possible fund raising corporate exercise or in the event of business opportunities arise
which involve the issuance of new shares, thus avoiding any delay and cost involved in convening a general meeting
to specifically approve such an issue of shares. This renewed mandate, unless revoked or varied at a general meeting,
will expire at the next Annual General Meeting of the Company.
As at the date of this Notice, no new shares of the Company were issued pursuant to the mandate granted to the
Directors at the last Annual General Meeting held on 28 June 2014, which mandate will lapse at the conclusion of the
forthcoming Annual General Meeting.
Statement Accompanying Notice Of Annual General Meeting

(Pursuant to Paragraph 8.27(2) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad)
No individual other than the retiring Directors is seeking appointment / election as a Director at the forthcoming Fortieth
Annual General Meeting of the Company. The details of the retiring Directors standing for re-appointment / re-election
are set out in the Directors Profile appearing on pages 5 to 6 of this Annual Report. An assessment on all the retiring
Directors had been conducted by the Nomination Committee.
Corporate
Information
BOARD OF DIRECTORS
Soo Thien Ming @ Soo Thien See (Chairman)
Soo Chung Yee (Group Chief Executive Director)
Col. (Rtd.) Dato Ir. Cheng Wah
Mohamed Razif Bin Tan Sri Abdul Aziz
Soo Wei Chian
COMPANY SECRETARY
AUDITORS
Jessica Chin Teng Li (MAICSA 7003181)
Baker Tilly Monteiro Heng

Chartered Accountants
Baker Tilly MH Tower
Level 10, Tower 1, Avenue 5
Bangsar South City
59200 Kuala Lumpur
Malaysia

REGISTERED OFFICE &

PRINCIPAL BUSINESS ADDRESS
No. 12, Jalan Jorak
Kawasan Perindustrian Tongkang Pecah
83010 Batu Pahat
Johor Darul Takzim
Malaysia
Tel. No.: 607-4151688
Fax No.: 607-4151135
CORPORATE OFFICE
No. L9, Jalan ML 16
ML-16 Industrial Park
43300 Seri Kembangan
Selangor Darul Eshan
Malaysia
Tel. No.: 603-89645600
Fax No.: 603-89645400
PRINCIPAL BANKERS
RHB Bank Berhad
Bank Muamalat Malaysia Berhad
AmBank (M) Berhad
Bangkok Bank Berhad
Bank of China (Malaysia) Berhad
LISTING
Bursa Malaysia Securities Berhad,
Main Market Listed since 1992
WEBSITE
SHARE REGISTRAR
Tricor Investor Services Sdn Bhd
Level 17, The Gardens North Tower
Mid Valley City
Lingkaran Syed Putra
59200 Kuala Lumpur
Malaysia
Tel. No.: 603-2264 3883
Fax No.: 603-2282 1886
www.hwatai.com
Profile of
The Board of Directors
MR. SOO THIEN MING @ SOO THIEN SEE
Non-Independent Non-Executive Director

Mr. Soo Thien Ming, Malaysian, aged 67, is the Chairman on the Board of the Company. He was appointed to the
Board on 26 April 1996. Mr. Soo is a Barrister-At-Law of Lincolns Inn, London. He is an advocate and solicitor by
profession and has been in practice for 40 years. He is also a Notary Public. He holds several directorships in private
companies in Malaysia and abroad.
He is the Chairman of the Nomination Committee and Remuneration Committee.
Mr. Soo has a direct shareholding of 30,949,567 ordinary shares of RM1/- each in the Company as at 30 April 2015. He
is deemed to have an interest in the equity holdings held by the Company in its subsidiaries by virtue of his controlling
interest in the Company.
He is the father of Mr. Soo Chung Yee, the Group Chief Executive Director of the Company.
Mr. Soo does not have any conflict of interest with the Company nor any conviction for any offence.
MR. SOO CHUNG YEE
Non-Independent Executive Director

Mr. Soo Chung Yee, Malaysian, aged 36, is the Group Chief Executive Director. He was appointed to the Board on 16
August 2004. Mr. Soo holds a Bachelor of Arts from the University of Derby, United Kingdom. He was awarded the Asia
Pacific Entrepreneurship Award (Emerging Entrepreneur Malaysia) in 2007 and the JCI Creative Young Entrepreneur
Award (Junior Chamber International Malaysia) in 2008. He also holds several directorships in private companies in
Malaysia and abroad.
He is a member of the Remuneration Committee.
He is the son of Mr. Soo Thien Ming, the Chairman of the Company.
Mr. Soo does not have any interest in the securities of the Company or its subsidiaries. He also does not have any
conflict of interest with the Company nor any conviction for any offence.
YBHG. COL. (RTD.) DATO IR. CHENG WAH

Independent Non-Executive Director
YBhg. Col. (Rtd.) Dato Ir. Cheng Wah, Malaysian, aged 76, was appointed to the Board on 1 August 2005. He holds
a Bachelor of Engineering degree in Civil Engineering from the University of Malaya. He is a Professional Engineer with
the Board of Engineers, Malaysia. He is also a graduate of the Royal Military Academy Sandhurst, United Kingdom and
the Command and General Staff College, Fort Leavenworth, United States of America.
He served the Malaysian Armed Forces for 26 years. Amongst the appointments he held was Director of Armed Forces
Works, Logistic Division, Ministry of Defence in 1978 and Director of Logistic, Ministry of Defence in 1980 before retiring
in September 1983. On retirement he joined Genting Group, became Director of Development and later a Senior Vice
President (Property Development) in Resorts World Berhad until his retirement in 2004. Currently, he is also a Director
of Brahims Holdings Berhad and Kien Huat Berhad. Earlier, he had served as a Director in Koperasi Angkatan Tentera
Malaysia Bhd (1978-1983), Chocolate Products (Malaysia) Berhad (1986-1989), Pacific Bank Berhad (1983-2000) and
PacificMas Berhad (2001-2007).
YBhg. Col. (Rtd.) Dato Ir. Cheng Wah is the Chairman of the Audit Committee.
He has a direct shareholding of 50,000 ordinary shares of RM1/- each in the Company as at 30 April 2015. He does
not have any interest in the securities of its subsidiaries.
He does not have any family relationship with any directors and/or major shareholders of the Company. He does not
have any conflict of interest with the Company nor any conviction for any offence.
Profile of
The Board of Directors (contd)
ENCIK MOHAMED RAZIF BIN TAN SRI ABDUL AZIZ

Encik Mohamed Razif Bin Tan Sri Abdul Aziz, Malaysian, aged 54, was appointed to the Board on 20 March 2006.
He is a Barrister-at-law from Lincolns Inn, United Kingdom. He was admitted as an Advocate and Solicitor of the High
Court of Malaya in 1985. He specialises in corporate, financial services and conveyancing matters and has handled
numerous housing projects for major developers and a variety of corporate as well as off-shore loan documentations.
He also specialises in Syariah Corporate Law and Syariah Conveyancing/Security documentation. He is an advisor for
internal disciplinary inquiry committees of various organisations. He is also involved in Commercialisation of Biotechnology
Products and Services and familiar with the Malaysian Intellectual Property laws. He is a committee member of the
Kuala Lumpur Malay Chamber of Commerce and is the Chairman of the Professional Committee of the said Chamber.
He is the Deputy President of Southampton University United Kingdom Alumni and a committee member of the Malay
College Old Boys Association (MCOBA). He holds non-executive directorships in various companies.
Encik Mohamed Razif sits on the Audit Committee and Nomination Committee.
have any interest in the securities of the Company or its subsidiaries. He does not have any conflict of interest with the
Company nor any conviction for any offence.
MR. SOO WEI CHIAN

Mr. Soo Wei Chian, Malaysian, aged 46, was appointed to the Board on 1 August 2005. He holds a Masters of
Business Administration, University of Strathclyde, United Kingdom. He is a fellow member of the Chartered Institute of
Management Accountants, United Kingdom and a member of the Malaysian Institute of Accountants. He held financial
positions in public listed companies for the period between 1991 and 1995. He joined NV Multi Corporation Berhad as
the Finance Manager in 1995 and he now holds the position of Executive Director in Nirvana Asia Ltd, a company listed
on the Hong Kong Stock Exchange.
Mr. Soo sits on the Audit Committee, Nomination Committee and Remuneration Committee.
have any interest in the securities of the Company or its subsidiaries. He does not have any conflict of interest with the
Company nor any conviction for any offence.
DETAILS OF ATTENDANCE OF DIRECTORS AT BOARD MEETINGS DURING THE FINANCIAL YEAR ENDED
31 DECEMBER 2014
During the financial year ended 31 December 2014, a total of six (6) Directors Meetings were held. The details of
attendance of Directors at these Meetings are as follows:
Name of Director
Number of Meetings Attended
Soo Thien Ming @ Soo Thien See
6 of 6
Soo Chung Yee
5 of 6
6 of 6
6 of 6
Soo Wei Chian
5 of 6
Audit
Committee Report
1.
COMPOSITION OF AUDIT COMMITTEE
Col. (Rtd.) Dato Ir. Cheng Wah (Chairman)
Soo Wei Chian *
* A member of the Malaysian Institute of Accountants

2.
TERMS OF REFERENCE OF AUDIT COMMITTEE
MEMBERSHIP
1.
An Audit Committee shall be appointed by the Directors from among their number (except Alternate Directors)
pursuant to a resolution of the Board of Directors which fulfils the following requirements:
(a)
(b)
(c)
(i)
(ii)
(iii)
The Audit Committee must be composed of no fewer than 3 Members;

All Members of the Audit Committee must be Non-Executive Directors, with majority of them being
Independent Directors; and
At least one Member of the Audit Committee:
Must be a member of the Malaysian Institute of Accountants; or
If he is not a member of the Malaysian Institute of Accountants, he must have at least 3 years working
experience and:
(1) He must have passed the examinations specified in Part 1 of the 1st Schedule of the Accountants
Act, 1967; or
(2) He must be a member of one of the associations of accountants specified in Part II of the 1st
Schedule of the Accountants Act, 1967; or
Fulfils such other requirements as prescribed or approved by Bursa Malaysia.
2.
The Members of the Audit Committee shall elect a Chairman from among their number who shall be an
Independent Director.
3.
If a Member of the Audit Committee resigns, dies or for any other reason ceases to be a Member with the
result that the number of Members is reduced below 3, the Board of Directors shall, within 3 months of that
event, appoint such number of new Members as may be required to make up the minimum of 3 Members.
4.
The terms of office and performance of the Audit Committee and each of its Members shall be reviewed
by the Board of Directors no less than once every 3 years.
Audit
Committee Report (contd)
MEETINGS
1.
Meetings shall be held not less than 4 times a year.
2.
Upon the request of the External Auditor, the Chairman of the Audit Committee shall convene a meeting of
the Committee to consider any matters the External Auditor believes should be brought to the attention of
the Directors or Shareholders. The External Auditor has the right to appear and be heard at any meeting of
the Audit Committee and shall appear before the Committee when required to do so by the Committee.
3.
The Chairman shall convene a meeting whenever any Member of the Audit Committee requests for a
meeting.
4.
Written notice of the meeting together with the agenda shall be given to the Members of the Audit Committee
and the External Auditor, where applicable.
5.
The quorum for a meeting shall be 2 Provided Always that the majority of Members present must be
Independent Directors and any decision shall be by a simple majority. The Chairman shall not have a casting
vote.
6.
The other Board Members, Accounts Manager, the Head of Internal Audit (if any), any employee of the
Company and a representative of the External Auditors may be invited to attend meetings. If necessary,
the Audit Committee shall meet with the External Auditors without any Executive Board Member present.
7.
The Company Secretary shall be the secretary of the Audit Committee.
AUTHORITY
The Audit Committee is authorised by the Board of Directors to:
a)
b)
c)
Investigate any activity within its terms of reference.

Seek any information it requires from any employee and all employees are directed to co-operate with any
request made by the Audit Committee.
Obtain outside legal or other independent professional advice and to secure the attendance of outsiders
with relevant experience and expertise if it considers this necessary.
The Audit Committee shall have direct access to the External Auditor and person(s) carrying out the internal audit
function or activity and be able to convene meetings with the External Auditor, Internal Auditor or both, excluding
the attendance of other members of the Board and employees of the Company, whenever necessary.
The Audit Committee shall be empowered to appoint and remove the Internal Auditor. The internal audit function
shall report directly to the Audit Committee.
Audit
DUTIES
The duties of the Audit Committee shall be:
1.
To recommend the nomination of a person or persons as External Auditors.
2.
To review the following and report the same to the Board of Directors:a.
With the External Auditor, the audit plan;
b.
With the External Auditor, his evaluation of the system of internal controls;
c.
With the External Auditor, his audit report;
d.
The assistance given by the employees of the Company to the External Auditor;
e.
The adequacy of the scope, functions, competency and resources of the Internal Audit functions and
that it has the necessary authority to carry out its work;
f.
The Internal Audit programme, processes, the results of the Internal Audit programme, processes or
investigation undertaken and whether or not appropriate action is taken on the recommendations of
the Internal Audit function;
g.
The quarterly results and year end financial statements, prior to the approval by the Board of Directors,
focusing particularly on:i)
Changes in or implementation of major accounting policy changes;
ii)
Significant and unusual events; and
iii)
Compliance with accounting standards and other legal requirements;
h.
Any related party transaction and conflict of interest situation that may arise within the Company or
group including any transaction, procedure or course of conduct that raises questions of management
integrity;
i.
Any letter of resignation from the External Auditors of the Company; and
j.
Whether there is reason (supported by grounds) to believe that the Companys External Auditor is
not suitable for re-appointment.
3.
To discuss problems and reservations arising from the interim and final audits, and matters the External
Auditor may wish to discuss (in the absence of management where necessary).
4.
To keep under review the effectiveness of internal control systems, and in particular review the External
Auditors management letter and managements response.
5.
To consider other topics, as agreed to by the Audit Committee and the Board of Directors.
PROCEDURES

Each Audit Committee may regulate its own procedure and in particular the calling of meetings, the notice to be
given of such meetings, the voting and proceedings thereat, the keeping of minutes and the custody, production
and inspection of such minutes.
3.
AUDIT COMMITTEE MEETING
During the financial year ended 31 December 2014, five (5) Audit Committee Meetings were held. Details of the
attendance of each Committee Member are as follows:Name of Audit Committee Member
Attendance
Col. (Rtd.) Dato Ir. Cheng Wah (Chairman)
5 of 5
5 of 5
Soo Wei Chian

4 of 5
10
Audit
4.
ACTIVITIES OF THE AUDIT COMMITTEE

During the financial year ended 31 December 2014, the activities of the Audit Committee included the following:
a.
b.
c.
d.
e.
f.
g.
h.
Reviewed and recommended for Board approval the quarterly financial results for public announcement.
Reviewed and discussed with the External Auditors their audit planning memorandum before commencement
of the financial year end audit.
Reviewed and discussed with the External Auditors their audit review memorandum and significant findings
in respect of the financial year end audit and the managements response.
Reviewed and recommended for Board approval the Groups audited financial year end statements.
Reviewed the related party transactions that had arisen within the Company and Group.
Reviewed the internal audit reports.
Convened meetings with the External Auditor without the attendance of the management. Two (2) of such
meetings were held during the financial year.
Assessed the suitability and independence of the External Auditors to be recommended for re-appointment.
5.
INTERNAL AUDIT
The Internal Audit function involves the implementation of independent and systematic reviews of the processes
and guidelines of the Group and the reporting of their application and compliance to the Audit Committee and
Board of Directors. The Internal Audit function also involves the reporting of the state of internal control of the
various operations within the Group and the extent of compliance with the established policies and procedures
and the suggestion of any additional improvement opportunities in the areas of internal control, systems and
efficiency improvement.
During the financial year ended 31 December 2014, the following Internal Audit activities which were performed
in-house, were carried out:a.
b.
c.
d.
Mapping of the current state of procedures and process.

Testing, evaluating and identifying potential areas that lack internal control.
Analysing and assessing certain key operation processes, report findings and make recommendation for
improvements.
Reviewing compliance with established policies and procedures, as well as assessing the adequacy and
effectiveness of the Groups internal control.
The Group incurred approximately Ringgit Fifty Three Thousand for the internal audit function during the financial
year ended 31 December 2014.
11
Statement of
Corporate Governance
BOARD RESPONSIBILITY
The Board of Directors is committed and continues to ensure the compliance with the principles and best practices
as set out in the Malaysian Code on Corporate Governance 2012 to ensure high standards of corporate governance
are practiced in the Group. The Board is pleased to provide the following statement on how the Group has applied the
principles and best practices as set out in the Malaysian Code on Corporate Governance.
BOARD OF DIRECTORS
A.
The Board.
The Board leads and controls the Group. The Board is bestowed with the duty and responsibility to ensure the
interests of the shareholders are protected. The duties and responsibilities of the Board which are separated from
that of the management, are spelt out in the Board Charter.
Where appropriate, formal structures and committees are in place to facilitate the Board in carrying out its duties.
All Board committees report to the Board.
The Board meets on a regular and scheduled basis, at least 4 times a year.
B.
Composition and Board Balance.
The Board comprises 5 members to reflect the interests of the major shareholder, management, and minority
shareholders.
The Chairman, who is a Non Independent Non Executive Director, heads the Board with an Executive Director
and 3 Independent Non Executive Directors.
The Directors together bring a wide range of business, financial, industrial and legal experience to lead the Group
in the area of business strategies, performance, utilization of resources and standards of conduct.
Generally, the Executive Director is responsible for carrying out the day to day operational functions while the Non
Executive Directors will play the supporting role by contributing their knowledge and experience in the business
strategic plans.
Where areas of conflict of interest arise, the Director concerned will have to declare his/her interest and abstain
from participating in the decision making process.
C.
Board Meetings and Supply of Information.
A Board report is prepared prior to the Board meeting and sufficient notice is given to the Directors to review the
papers and agenda for the meeting.
Generally, the Board papers provide information on the operating results, financial, corporate development, minutes
of Board Committees and acquisitions and disposals proposals, if any.
In furtherance of the Directors duties, all members, either as full Board or in their individual capacities, will have
access to all information of the Group.
Directors are also free to seek independent advice should the need arise and have direct access to the advice
and services of the Company Secretary.
12
Statement of
Corporate Governance (contd)
During the financial year ended 31 December 2014, the total number of Directors Meetings convened was six
(6). The details of attendance of Directors at these Meetings are as follows:
Name of Director
Number of Meetings Attended
6 of 6
Soo Chung Yee
5 of 6
6 of 6
6 of 6
Soo Wei Chian
5 of 6
D.

Appointments to the Board.
The Nomination Committee comprises Mr. Soo Thien Ming, En. Mohamed Razif Bin Tan Sri Abdul Aziz and Mr. Soo
Wei Chian, all of whom are non-executive directors and a majority of whom are independent. Mr. Soo Thien Ming,
who is a non-independent director holds the Chair of the Nomination Committee as his extensive chairmanship
experience will assist in leading the Nomination Committee professionally and effectively.
The Committee shall make recommendations to the Board on the appropriate appointments of new Directors
and also to fill seats on committees of the Board. In making recommendation to the Board on the candidate
for appointment, the Committee shall determine various criteria including qualities, experience, skills, level of
commitment and time that the candidate can contribute and shall also take into consideration the composition
and mix skills of the existing Board. Whilst the Committee respects the requirement for gender diversity, emphasis
shall first be placed on the qualities, experience and skills of a candidate irrespective of gender, which would best
correspond to the composition of the Board so as to function effectively and efficiently.
In addition, the Nomination Committee assesses the contribution of individual Board members, the effectiveness
of the Board and the committees of the Board on an annual basis.
The duties and responsibilities are spelt out in the Terms of Reference of the Nomination Committee.
During the financial year, the Committee had carried out an evaluation of each Directors ability to contribute to
the effectiveness of the Board and its committees, including an assessment of the independent directors on their
independence. It also evaluated the Directors who were due for retiring and proposed these retiring Directors to
the Board to be put forward for re-election by the shareholders.
In compliance with the Malaysian Code on Corporate Governance on the appointment of Directors, the Board
had set up a Nomination Committee to advise the Board on the nomination of new Board members and assess
Directors on an ongoing basis.
E. Re-election.

In accordance to the Companys Articles of Association, an election of Directors shall take place each year at
an Annual General Meeting and all Directors shall retire from office at least once in every 3 years. In addition, a
Director who attains the age over 70 retires at every Annual General Meeting pursuant to the Companies Act,
1965. Directors appointed by the Board are subject to retirement at the next Annual General Meeting held following
their appointments in accordance with the Companys Articles of Association. All retiring Directors are eligible for
re-election.
The tenure of an independent director should not exceed a cumulative term of 9 years. Upon completion of the
9 years, the independent director may continue to serve on the Board subject to the directors re-designation as
a non-independent director. The Board must justify and seek shareholders approval in the event it retains, as an
independent director, a person who has served in that capacity for more than 9 years.
13
Statement of
DIRECTORS TRAINING
The Nomination Committee is tasked to facilitate Board induction and training programmes.
All the Directors had attended the Mandatory Accreditation Programme.
During the financial year, certain Directors have attended trainings in a various areas to enhance their skills so as to
contribute more effectively to the Company. Directors who were unable to attend any formal training during the financial
year, are well-informed of the latest developments on the various relevant rules and regulations as all Directors were
updated by the Management, by providing them with reading materials on such new developments.
The conferences, seminars and training programmes attended by various Directors during the financial year were as
follows:

Market Outlook for 2014.

Enhancing Internal Audit Practice.
MASB Roundtable on Financial Reporting.
Briefing on the new Goods and Services Tax.
Advocacy Session on Corporate Disclosure for Directors of Listed Issuers.
DIRECTORS REMUNERATION
The Board set up the Remuneration Committee to review the policy and make recommendations to the Board on the
remuneration package and benefits annually as accorded to the Executive Directors. The Executive Directors shall not
participate in the decision makings relating to their own remunerations.
The members of the Remuneration Committee comprises Mr. Soo Thien Ming, Mr. Soo Chung Yee and Mr. Soo Wei
Chian, a majority of whom are non-executive directors. Mr. Soo Thien Ming is the Chairman of the Committee.
Fees payable to the Directors are proposed by the Remuneration Committee to the Board who will then recommend
for shareholders approval at the Annual General Meeting.
Generally, the remuneration package will be structured according to the skills, experience and performance of the
Executive Directors to ensure the Group attracts and retains the Directors needed to run the Group successfully, whereas
the remuneration package for the Non Executive Directors will hinge on their contribution to the Group in terms of their
knowledge and experience.
The breakdown of the Directors remuneration including the estimated monetary value of benefit in kind for the financial
year under review is disclosed in Note 16(a) to the financial statements.
SHAREHOLDERS
Dialogue between the Group and Investors
The Group recognizes the importance of accountability to the shareholders and as such conveys information on the
Groups performance, directions, other matters of interest to the shareholders by way of annual reports, relevant circulars,
public announcements, the Companys website and the issuance of press releases.
14
Statement of
Annual General Meeting

Annual General Meeting is used as a primary mode of communication to report on the Groups performance. Notice of
Annual General Meeting is issued at least 21 days before the date of meeting.
At the Annual General Meeting, shareholders are encouraged to raise any questions pertaining to any issues regarding
the Group.
The Chairman, assisted by the Directors are available to answer any queries and discuss matters pertaining to the
business activities of the Group.
Where appropriate, the Chairman shall put substantive resolutions to vote by poll, and the results of such votes shall
be announced to the public detailing the number of votes cast for and against.
ACCOUNTABILITY AND AUDIT
Financial Reporting
In preparing the annual financial statements and quarterly financial results, the Directors take steps to ensure a clear,
balanced and understandable assessment of the Groups positions and prospects.
The Audit Committee is tasked to review and recommend for Board approval the Groups annual financial statements
and quarterly financial results.
The Statement by Directors pursuant to section 169 of the Companies Act, 1965 is set out on page 83 of this Annual
Report.
Risks Management and Internal controls
The Board recognizes its responsibilities to maintain a sound system of risk management and internal controls to
safeguard shareholders investment and Groups assets.
The review of the system of risks management and internal controls is set out under the Statement of Risks Management
and Internal Controls set out on pages 15 and 16 of this Annual Report. The Statement of Risks Management and
Internal Controls had been reviewed by the external auditors.
Audit Committee / Relationship with Auditors.
The Audit Committee works closely with the external auditors and maintains a transparent professional relationship
with them.
A summary of the activities of the Audit Committee during the year are set out in the Audit Committee Report on pages
7 to 10 of this Annual Report.
Ethical Conduct and Sustainability
Employees are introduced to the ethical corporate culture of the Group during employee induction and thereafter,
employees are constantly monitored to ensure the culture is upheld in their dealings within the Group and also in their
association with our customers, distributors, suppliers, governmental and regulatory authorities and other business
associates. Any employee may report directly to the Chairman of any ethical misconduct discovered within the Group.
The Group consistently conducts its business in a manner which underpins sustainability.
A written code of conduct on ethical standards and a formal policy on promoting sustainability are currently being
established.
15
Statement on
Risk Management and Internal Control
INTRODUCTION
The Board of Directors of Hwa Tai Industries Berhad (HTIB) is pleased to present its Statement on Risk Management
and Internal Control for the financial year ended 31 December 2014, which has been prepared pursuant to paragraph
15.26(b) of Bursa Malaysia Securities Berhad (Bursa Securities) Main Market Listing Requirements and guided by the
Statement on Risk Management and Internal Control: Guidelines for Directors of Listed Issues.
BOARD RESPONSIBILITY
The Board of Directors recognises its overall responsibility for maintaining the Groups system of Risks Management and
Internal Controls to safeguard shareholders investment and the Groups assets, as well as for regularly reviewing the
adequacy and integrity of the internal control system. Due to limitations inherent in any system of internal control, it is
important to note that the system is designed to manage rather than eliminate risk of failure to achieve corporate objectives.
Therefore, the system can only provide reasonable and not absolute assurance against material misstatement or loss.
The Board has received verbal assurance from the Group Chief Executive Director and Financial Controller that, to
their best knowledge and belief, the Groups risk management and internal control system is operating adequately and
effectively, in all material aspects, based on the risk management and internal control system of the Group.
RISK MANAGEMENT
The Board also recognises that risk management should be an integral part of the Group culture and is a continuous on
going process of identifying, evaluating, minimising and managing of significant risk faced by the Group during the year
under review and up to the date of approval of the statement for disclosure in the Annual Report. The management is
responsible for creating risk awareness culture and to build the necessary environment for effective risk management.
In addition, the Heads of Department are responsible for managing the risk of their department on a day to day basis.
Significant issues related to risks management and internal controls are highlighted to the Board. If deemed necessary,
assistance from external parties shall be consulted on issues in which the Board needs to seek an opinion.
KEY ELEMENTS OF INTERNAL CONTROLS
Key elements of the Groups internal controls that have been in place for the financial year which include the following:
1.
The Group has a well defined organisation structure with clear lines of reporting, responsibilities and level of
authority.
2.
There are clear definition of authorisation procedures for major operating functions including purchases, capital
expenditures, payments, credit control and stock control. Authority of the Directors is required for key treasury
matters which include loan and trade financing, cheque signatories and opening of bank accounts.
3.
There is a budgeting and business planning process in each financial year to establish plans and targets for each
operating units. The performance of each operating unit is monitored through monthly reports.
4.
The Groups management team meets at least once a month to review and monitor the business development,
discuss and resolve key operational and management issues and review the performance against the business
plan and budget for each operating units within the Group.
The management also highlights any significant issues and changes in the business, major policy matters, external
environment affecting the Group and financial performance of each operating unit to the Board of Directors and
Audit Committee when the Board and Committee meet quarterly.
5.
Adequate financial and operational information systems are in place to capture and present timely and pertinent
business information.
16
Statement on
Risk Management and Internal Control (contd)
6.
The Audit Committee reviews the quarterly financial results and yearly audited financial statements prior to the
approval by the Board of Directors.
7.
The Audit Committee also reviews the internal auditors reports and monitors the status of the implementation of
corrective actions to address internal control weaknesses.
8.
In addition to the internal controls, the Board of Directors and management have ensured that safety and health
regulations have been considered and complied with.
9.
The Company was accredited ISO 9002 since 1996 and upgraded to MS ISO 9001:2008 quality management
systems since year 2010. Documented internal procedures and standard operating procedures have been put
in place and surveillance audits are conducted by the assessors of the ISO certification body to ensure that the
system is adequately implemented.
10.
Emphasis is given to food safety. The Company was accredited the Hazard Analysis Critical Control Point (HACCP)
system certification since year 2000 and upgraded to Integrated Quality Management & HACCP System certificate
since 2002. Good Manufacturing Practice is documented and practiced to ensure food safety.
11. In ensuring each operating unit is functioning efficiently, much emphasis is placed on personnel employed. The
professionalism and competence of the staff are maintained through a structural recruitment process, performance
appraisal system and wide variety of training and development programs.
As required by Paragraph 15.23 of Bursa Securities Listing Requirements, the External Auditors have conducted a
limited assurance engagement on this Statement on Risk Management and Internal Control. Their limited assurance
engagement was performed in accordance with ISAE3000, Assurance Engagement other than Audits or Review of
Historical Financial Information and Recommended Practice Guide (RPG) 5, Guidance for Auditors on the Review of
Directors Statement on Internal Control included in the Annual Report.
Based on their procedures performed, the External Auditors have reported to the Board that nothing has come to their
attention that causes them to believe that this statement is not prepared, in all material aspects, in accordance with
disclosure required by paragraphs 41 and 42 of the Statement on Risk Management and Internal Control: Guidance
for Directors of Listed Issuers to be set out, nor is factually inaccurate. RPG 5 does not require the External Auditors to
consider whether this Statement covers all risks and controls, or to form an opinion on the adequacy and effectiveness
of the Groups risk and control system.
17
Directors
Responsibility Statement and Other Information
DIRECTORS RESPONSIBILITY STATEMENT
The Board of Directors is required under Paragraph 15.26(a) of the Listing Requirements of the Bursa Malaysia Securities
Berhad (Bursa Malaysia) to issue a statement explaining their responsibility for preparing the annual audited financial
statements.
The Directors are required by law to prepare financial statements for each financial year which give a true and fair view
of the state of affairs of the Company and of the Group as at the financial year end and of the results and cashflows of
the Company and of the Group for the financial year then ended.
The Directors consider that, in preparing the financial statements of the Company and of the Group for the financial year
ended 31 December 2014 as set out herein on pages 25 to 81 of this Annual Report, the Company and the Group have
used appropriate accounting policies, consistently applied and supported by reasonable and prudent judgements and
estimates. The Directors also consider that all applicable approved accounting standards have been followed in respect
of the preparation of the financial statements.
The Directors are responsible for ensuring that the Company keeps accounting records which disclose with reasonable
accuracy at any time the financial position of the Company and which enable them to ensure that the financial statements
comply with the provisions of the Companies Act, 1965.
The Directors are also responsible for taking such steps that are reasonably open to them to safeguard the assets of
the Group and to prevent and detect fraud and other irregularities.
OTHER INFORMATION
Sanctions and/or Penalties
There were no sanctions and/or penalties imposed on the Company and its subsidiaries, Directors or management by
any relevant regulatory bodies during the financial year other than the compound and penalty of about Ringgit Eighty
Three Thousand imposed by the Royal Malaysian Customs Department on the Group for sales tax leviable on free
trade-offer products.
Material Contracts
There were no material contracts entered into by the Company and its subsidiaries involving Directors and major
shareholders interests, either still subsisting at the end of the financial year end or entered into since the end of the
previous financial year end.
Non-Audit Fees
The amount of non-audit fees incurred for services rendered to the Group by the Auditors, Messrs. Baker Tilly Monteiro
Heng, or a firm or corporation affiliated to them totalled approximately Ringgit Sixty Three Thousand during the financial
year.
18
Directors
Responsibility Statement and Other Information (contd)
Utilisation of Proceeds raised from Corporate Proposals

There were no proceeds raised from any corporate proposals during the financial year.
The proceeds of approximately Ringgit Fourteen million, raised from the Companys Rights Issue completed recently
in April 2015 as stated in Note 26 of the audited financial statements for the financial year ended 31 December 2014,
will only be utilised after its completion and the status of the utilisation will be disclosed in the forthcoming quarterly
financial results.
Share Buy-Backs
The Company did not make any share buy-back arrangement during the financial year.
Options and Convertible Securities
The Company did not issue any options or convertible securities during the financial year.
Depository Receipt
The Company did not sponsor any depository receipt programme during the financial year.
Variation in Results
There was no material variation between the audited results for the financial year ended 31 December 2014 and the
unaudited results previously released for the financial quarter ended 31 December 2014.
Profit Guarantee
The Company did not make any arrangement during the financial year which requires profit guarantee.
Recurrent Related Party Transaction of a Revenue Nature
There was no recurrent related party transaction of a revenue nature which requires Shareholders mandate during the
financial year.
19
Chairmans
Statement
Dear Shareholders,
On behalf of the Board of Directors, I am pleased to present the Annual Report and
the Audited Financial Statements of Hwa Tai Industries Berhad and its group of
companies for the financial year ended 31 December 2014.
Business Environment in 2014

Developing growth for the Group in 2014 turned out to be challenging in the current economic environment. Increased
competition in a weak consumer market had dampened the Groups sales performance both locally and overseas.
Financial Review
The Group recorded a decline in revenue of RM61.33 million as compared to RM65.80 million in the preceding year.
The lower revenue is mainly due to the further drop in sales from both the domestic and international markets arising
from continued increase in competition.
Consequently, the Group incurred a loss after tax of RM2.44 million against a profit after tax of RM0.41 million in the
preceding year due to the lower revenue which was insufficient to cover fixed costs such as staff cost, depreciation and
utilities expenses in addition to the expenses incurred in relation to the Companys recent corporate exercise.
Corporate Development
The Companys following corporate exercise, which had been approved by the Shareholders at the Extraordinary General
Meeting held on 12 November 2014, were fully completed on 14 April 2015:1.
The reduction of the issued and paid-up share capital of the Company pursuant to Section 64(1) of the Companies
Act, 1965 involving the cancellation of RM0.60 of the par value of each ordinary share of RM1.00 in the Company.
As such, the par value of each existing ordinary share in the Company has been reduced from RM1.00 to RM0.40
each (Par Value Reduction);
2.
The amendment to the Memorandum of Association of the Company to facilitate the Par Value Reduction
(Amendment to Memorandum);
3.
The renounceable rights issue of up to 60,063,600 new shares of the Company of RM0.40 each (Rights Shares)
at an issue price of RM0.40 per Rights Shares on the basis of three (3) Rights Shares for every two (2) existing
shares of the Company held after the Par Value Reduction based on a minimum subscription level of 30,031,800
Rights Shares (Rights Issue); and
4.
The exemption to the major shareholder, Mr. Soo Thien Ming @ Soo Thien See (Mr. Soo) and persons acting
in concert with Mr. Soo (PACS) from the obligation to undertake a mandatory take-over offer to acquire all the
remaining shares of the Company not already owned by Mr. Soo and his PACS upon completion of the Rights
Issue pursuant to Practice Note 9, Paragraph 16.1 of the Malaysian Code on Take-Overs and Mergers 2010
(Exemption).
The acceptance and excess applications received under the Rights Issue were 34,790,870 Rights Shares. This represents
an under-subscription of 25,272,730 Rights Shares or approximately 42.08% over the total of 60,063,600 Rights Shares
available for subscription under the Rights Issue. Notwithstanding the under-subscription, the minimum subscription
level of 30,031,800 Rights Shares for the Rights Issue had been achieved and a total of RM13,916,348.00 was raised.
Arising from the corporate exercise, the current issued and paid-up share capital of the Company stands at
RM29,933,308.00 comprising 74,833,270 ordinary shares of RM0.40 each.
20
Chairmans
Statement (contd)
Corporate Social Responsibility

In carrying out its corporate social responsibility, the Company continued with its tradition of contributing annually to
various schools and non-profit organisation both monetarily and in-kind.
Outlook and Future Prospects for 2015
We anticipate macroeconomic conditions in Malaysia to remain challenging in the year ahead, with the introduction of the
Goods & Services Tax with effect from 1 April 2015 and inflationary pressures plus other economic challenges. These are
expected to weaken consumer confidence which might impact consumer spending, notwithstanding higher household
disposable incomes from lower fuel prices, favourable labour market conditions and the Government measures to assist
low-and-middle income households.
On the global front, although the growth momentum is strengthening in some economies (e.g. US and UK), the slowing
or tepid growth in several major economies (e.g. Japan, Middle East, certain Euro Zone) makes the global economy to
remain vulnerable to downside risks. This more moderate recovery of the global economy projected for 2015 is generating
a challenging environment with volatile raw materials and packaging materials costs, decline in global oil prices and
unpredictable foreign exchange rates.
Nevertheless, the Group will be vigilant and respond accordingly to the changing business dynamics and market
environment with our constant focus in improving its performance and enhancing shareholder value by innovating our
products portfolio, broadening our distribution networks and enhancing the overall operational efficiency.
Acknowledgement
On behalf of the Board, I wish to express our sincere appreciation to the management and staff of the Group for their
hard work and dedication. Our thanks also go towards all our shareholders, customers, distributors, business associates,
financiers, suppliers and governmental and regulatory authorities for their valued support.
SOO THIEN MING @ SOO THIEN SEE

Chairman

28 May 2015
21
Directors
Report
The directors hereby submit their report together with the audited financial statements of Hwa Tai Industries Berhad (the
Company) and its subsidiary companies (the Group) for the financial year ended 31st December 2014.
PRINCIPAL ACTIVITIES
The principal activities of the Company are that of a biscuit manufacturer and investment holding. The principal activities
of the subsidiary companies are disclosed in Note 6 to the financial statements.
There have been no significant changes in the nature of these principal activities during the financial year.
RESULTS

Group
RM
Company
RM
Loss for the financial year attributable to:

Owners of the Company
Non-controlling interest
(2,439,745)
4,646
(1,309,536)
(2,435,099)
(1,309,536)
DIVIDENDS
No dividend was paid or declared by the Company since the end of the previous financial year.
The directors do not recommend the payment of any dividends in respect of the financial year ended 31st December 2014.
RESERVES AND PROVISIONS
All material transfers to and from reserves and provisions during the financial year have been disclosed in the financial
statements.
BAD AND DOUBTFUL DEBTS
Before the statements of profit or loss and other comprehensive income and statements of financial position of the
Group and of the Company were made out, the directors took reasonable steps to ascertain that proper action had
been taken in relation to the writing off of bad debts and the making of allowance for doubtful debts, and had satisfied
themselves that all known bad debts had been written off and adequate allowance had been made for doubtful debts.
At the date of this report, the directors are not aware of any circumstances which would render the amount written off
for bad debts or the amount of the allowance for doubtful debts, in the financial statements of the Group and of the
Company inadequate to any substantial extent.
CURRENT ASSETS
Before the statements of profit or loss and other comprehensive income and statements of financial position of the Group
and of the Company were made out, the directors took reasonable steps to ensure that any current assets, other than
debts, which were unlikely to be realised in the ordinary course of business, their values as shown in the accounting
records of the Group and of the Company had been written down to an amount that they might be expected to be realised.
At the date of this report, the directors are not aware of any circumstances that would render the values attributed to
the current assets in the financial statements of the Group and of the Company misleading.
22
Directors
Report (contd)
VALUATION METHODS
At the date of this report, the directors are not aware of any circumstances which have arisen which render adherence
to the existing methods of valuation of assets or liabilities of the Group and of the Company misleading or inappropriate.
CONTINGENT AND OTHER LIABILITIES
At the date of this report, there does not exist:(i)
any charge on the assets of the Group and of the Company that has arisen since the end of the financial year
which secures the liabilities of any other person, or
(ii)
any contingent liabilities in respect of the Group and of the Company that has arisen since the end of the financial
year.
No contingent liabilities or other liabilities of the Group and of the Company have become enforceable, or is likely to
become enforceable within the period of twelve months after the end of the financial year which, in the opinion of the
directors, will or may substantially affect the ability of the Group and of the Company to meet their obligations as and
when they fall due.
CHANGE OF CIRCUMSTANCES
At the date of this report, the directors are not aware of any circumstances, not otherwise dealt with in this report or the
financial statements of the Group and of the Company that would render any amount stated in the financial statements
misleading.
ITEMS OF AN UNUSUAL NATURE
The results of the operations of the Group and of the Company for the financial year were not, in the opinion of the
directors, substantially affected by any item, transaction or event of a material and unusual nature.
No item, transaction or event of a material and unusual nature has arisen in the interval between the end of the financial
year and the date of this report which is likely to affect substantially the results of the operations of the Group and of the
Company for the financial year in which this report is made.
ISSUE OF SHARES AND DEBENTURES
The Company did not issue any shares or debentures during the financial year.
DIRECTORS
The names of the directors of the Company in office since the date of the last report and at the date of this report are:Soo Thien Ming @ Soo Thien See
Soo Chung Yee
Soo Wei Chian

23
Directors
Report (contd)
DIRECTORS INTERESTS
According to the register of directors shareholdings kept by the Company under Section 134 of the Companies Act,
1965 in Malaysia, the interests of those directors who held office at the end of the financial year in shares in the Company
during the financial year ended 31st December 2014 are as follows:
Number of ordinary shares of RM1/- each
At At
1.1.2014
Bought
Sold 31.12.2014
The Company
Direct interests
12,372,627
20,000
7,200

12,379,827
20,000
Soo Thien Ming @ Soo Thien See is deemed to have an interest in the shares held by the Company in its subsidiary
companies by virtue of his controlling interest in the Company.
Other than as disclosed above, none of the other directors in office at the end of the financial year had any interest in
shares in the Company or its related corporations during the financial year.
DIRECTORS BENEFITS
Since the end of the previous financial year, no director of the Company has received or become entitled to receive a
benefit (other than benefits included in the aggregate amount of emoluments received or due and receivable by the
directors of the Company as shown in Note 16 to the financial statements) by reason of a contract made by the Company
or a related corporation with the director or with a firm of which the director is a member, or with a company in which
the director has a substantial financial interest.
Neither during nor at the end of the financial year was the Company or any of its related corporations a party to any
arrangement, whose object was to enable the directors to acquire benefits by means of the acquisition of shares in, or
debentures of, the Company or any other body corporate.
SIGNIFICANT SUBSEQUENT EVENT
Significant event that occurred after the financial year end are disclosed in Note 26 to the financial statements.
24
Directors
Report (contd)
AUDITORS
The auditors, Messrs. Baker Tilly Monteiro Heng, have expressed their willingness to continue in office.
On behalf of the Board,

Director
SOO CHUNG YEE

Director
Kuala Lumpur
Date: 23rd April 2015
25
Consolidated
Statement of Financial Position
As at 31st December 2014

Group
Company

2014 2013 2014 2013

Note
RM
RM
RM
RM
ASSETS
Non-current assets
Property, plant and equipment
Prepaid land lease payments
Investment in subsidiaries
Investment in an associated company
4
5
6
7
15,319,519
1,113,679

2,161,489
15,977,281
1,157,113

1,633,215
13,103,195
652,964
4,732,149
1,791,457
13,546,511
679,761
4,732,149
1,791,457
Total non-current assets

Current assets
Inventories
8
Trade and other receivables
9
Prepayments
Tax recoverable
Cash and bank balances

Total current assets
18,594,687
18,767,609
20,279,765
20,749,878
4,899,812
24,465,681
414,351
111,928
1,666,495
5,175,586
24,624,077
344,187
135,749
1,972,514
4,204,176
24,303,873
388,180
82,663
1,124,706
4,479,644
22,522,805
315,530
1,657,388
31,558,267
32,252,113
30,103,598
28,975,367
TOTAL ASSETS
50,152,954
51,019,722
50,383,363
49,725,245
Equity attributable to the owners

of the Company
Share capital
10
Accumulated losses
Translation reserves
7
40,042,400
(27,405,113)
531,145
40,042,400
(24,965,368)

40,042,400
(22,406,557)

40,042,400
(21,097,021)
Shareholders funds
Non-controlling interests
13,168,432
16,480
15,077,032
11,834
17,635,843

18,945,379
Total equity
13,184,912
15,088,866
17,635,843
18,945,379
11
501,077
715,747
458,346
586,804
Total non-current liability
501,077
715,747
458,346
586,804
Current liabilities
Trade and other payables
12
Loans and borrowings
11
Tax payable
19,074,510
17,236,391
156,064
17,863,224
17,120,900
230,985
15,138,994
17,150,180

13,147,260
16,970,881
74,921
Total current liabilities
36,466,965
35,215,109
32,289,174
30,193,062
Total liabilities
36,968,042
35,930,856
32,747,520
30,779,866
50,152,954
51,019,722
50,383,363
49,725,245
Non-current liability
TOTAL EQUITY AND LIABILITIES
The accompanying notes form an integral part of these financial statements.
26
Statements of Profit or Loss and

Other Comprehensive Income
For the financial year ended 31st December 2014

Group
Company

2014 2013 2014 2013

Note
RM
RM
RM
RM

Revenue
13 61,331,600
65,799,286
48,384,347
51,451,517
Cost of sales
14 (46,096,399)
(48,998,011)
(34,584,394)
(36,598,983)
Gross Profit
15,235,201
16,801,275
13,799,953
14,852,534
Other income
Selling and distribution expenses
Administrative expenses
Other expenses
Share of results of an associated
company
Finance costs
15
912,865
(9,853,929)
(7,321,256)
(382,254)
1,122,737
(9,404,457)
(6,304,772)
(230,612)
880,260
(8,643,186)
(6,016,356)
(376,905)
913,668
(8,242,604)
(4,888,351)
(278,193)
(2,871)
(1,057,415)
(123,191)
(1,116,029)

(987,862)
(1,036,351)
(Loss)/profit before taxation
16
(2,469,659)
744,951
(1,344,096)
1,320,703
Taxation
17
34,560
(331,545)
34,560
(348,178)
(Loss)/profit for the financial year
(2,435,099)
413,406
(1,309,536)
972,525
531,145
Total comprehensive (loss)/

income for the financial year
(1,903,954)
413,406
(1,309,536)
972,525
(Loss)/profit for the financial year

attributable to:
(2,439,745)
4,646
401,572
11,834
(1,309,536)

972,525
(2,435,099)
413,406
(1,309,536)
972,525
Total comprehensive (loss)/

income attributable to:
(1,908,600)
4,646
401,572
11,834
(1,309,536)

972,525
(1,903,954)
413,406
(1,309,536)
972,525
(Loss)/earnings per share (sen)

18
- basic
- diluted
(6.09)
(6.09)
Other comprehensive income, net

of items that will be reclassified
subsequently to profit or loss
Translation reserves
1.00
1.00
27
Statements of
Changes in Equity

<------ Attributable to Owners of the Company ----->

Non
distributable
Non
Share Accumulated Translation Shareholders controlling

Capital
Losses
reserves
funds
Interests
Group
RM
RM
RM
RM
RM
At 1st January 2013
Total
equity
RM
40,042,400
(25,366,940)
14,675,460
14,675,460
401,572
401,572
11,834
413,406
At 31st December 2013
40,042,400
(24,965,368)
15,077,032
11,834
15,088,866
Total comprehensive loss

for the financial year
(2,439,745)
531,145
(1,908,600)
4,646
(1,903,954)
40,042,400
(27,405,113)
531,145
13,168,432
16,480
13,184,912
Total comprehensive income

Attributable to Owners
of the Company

Share
Accumulated
Capital
Losses
Company
RM
RM
At 1st January 2013 40,042,400
Total
RM
(22,069,546)
17,972,854
972,525
972,525
At 31st December 2013 40,042,400
(21,097,021)
18,945,379
(1,309,536)
(1,309,536)
At 31st December 2014 40,042,400
(22,406,557)
17,635,843
Total comprehensive income

Total comprehensive loss

28
Statements of
Cash Flows

Group
Company

2014 2013 2014 2013

RM
RM
RM
RM
OPERATING ACTIVITIES:
(2,469,659)
744,951
(1,344,096)
1,320,703
357,184

227,612

357,184

188,399
89,794
(277,976)
(285,397)
(277,976)
(235,397)
43,434
25,071

43,434
3,000
18,000
26,797
19,722

26,797
1,964,652
1,920,895
1,665,539
1,634,555

(8,411)
1,057,415
7,384
(32,533)
(14,126)
1,116,029
5,945

(8,219)
987,862
7,384
(32,533)
(13,964)
1,036,351
5,945
2,987
2,871
(157,782)

123,191
(32,265)
2,987

(157,782)
(32,265)
547,170
3,838,736
1,279,402
3,988,385
Changes In Working Capital:

Inventories
Receivables
Prepayments
Payables
275,774
191,019
(70,164)
1,211,286
(2,698)
1,120,407
(65,238)
(682,821)
275,468
(198,226)
(72,650)
2,036,259
68,090
692,430
(73,571)
(697,831)
Net cash flows from operations
2,155,085
4,208,386
3,320,253
3,977,503
Interest paid
Tax paid
Tax refunded
(965,270)
(232,332)
215,792
(958,929)
(255,353)
49,580
(912,075)
(204,235)
81,211
(902,733)
(205,772)
Net cash flows from operating activities
1,173,275
3,043,684
2,285,154
2,868,998
Adjustments for:
Impairment loss on receivables
Impairment loss on subsidiary companies
Impairment loss no longer
required on trade receivables
Amortisation of prepaid land lease
payments
Bad debts written off
Deposit written off
Depreciation of property, plant and
equipment
Gain on disposal of property, plant
and equipment
Interest income
Interest expenses
Property, plant and equipment written off
Loss on disposal of property, plant and
equipment
Share of results in an associated company
Gain on unrealised foreign exchange

Operating cash flows before changes in
working capital
29
Statements of
Cash Flows (contd)

Group
Company

2014 2013 2014 2013

Note
RM
RM
RM
RM
INVESTING ACTIVITIES:
Purchase of property, plant and
equipment
(a)
Proceeds from disposal of property,
plant and equipment
Interest received
(Advances)/repayments (to)/from
subsidiary companies
(1,092,616)
(589,380)
(1,007,949)
(472,197)
980
8,411
54,890
14,126
980
8,219
54,890
13,964
(1,589,395)
353,945
(1,083,225)
(520,364)
(2,588,145)
(49,398)
Drawdown/(repayment) of short term

borrowings
Repayment of term loans
Payment of finance lease liabilities
Interest paid
762,025
(497,150)
(417,199)
(92,145)
(1,501,100)
(521,599)
(593,683)
(157,100)
762,025
(497,150)
(267,179)
(75,787)
(1,501,100)
(521,599)
(433,874)
(133,618)
(244,469)
(2,773,482)
(78,091)
(2,590,191)
NET CHANGE IN CASH AND

CASH EQUIVALENTS
(154,419)
(250,162)
(381,082)
229,409
(480,807)
(234,297)
(795,933)
(1,028,994)
20,880
3,652
20,880
3,652
(b)
(614,346)
(480,807)
(1,156,135)
(795,933)
Net cash flows used in investing

activities
FINANCING ACTIVITIES:
Net cash flows used in financing

activities
CASH AND CASH EQUIVALENTS

AT BEGINNING OF THE
FINANCIAL YEAR
Effects of the exchange rate
changes
CASH AND CASH EQUIVALENTS AT
END OF THE FINANCIAL YEAR
30
Statements of
Cash Flows (contd)
(a)
During the financial year, the Group and the Company made the following cash payments to purchase property,
plant and equipment:-

Group
Company

2014 2013 2014 2013

RM
RM
RM
RM
(b)
Purchase of property, plant and

equipment
Financed by finance lease arrangement
1,318,241
225,625
1,002,403
413,023
1,233,574
225,625
849,855
377,658
Cash payments on purchase of property,

plant and equipment
1,092,616
589,380
1,007,949
472,197
Cash and cash equivalents included in the statements of cash flows comprise the following statements of financial
position amounts:-

Group
Company

2014 2013 2014 2013

Note
RM
RM
RM
RM
Bank overdrafts
11
1 ,666,495
(2,280,841)
1 ,972,514
(2,453,321)
1 ,124,706
(2,280,841)
1,657,388
(2,453,321)
(614,346)
(480,807)
(1,156,135)
(795,933)
31
Notes to the
Financial Statements
1.
PRINCIPAL ACTIVITIES AND GENERAL INFORMATION
The principal activities of the Company are that of a biscuit manufacturer and investment holding. The principal
activities of the subsidiary companies are disclosed in Note 6 to the financial statements. There have been no
significant changes in the nature of these principal activities during the financial year.
The Company is a public limited liability company, incorporated and domiciled in Malaysia, and listed on Main
Market of Bursa Malaysia Securities Berhad.
The registered office and the principal place of business of the Company are both located at No. 12, Jalan Jorak,
Kawasan Perindustrian Tongkang Pecah, 83010 Batu Pahat, Johor Darul Takzim.
The financial statements were authorised for issue by the Board of Directors in accordance with a resolution of
the directors on 21st April 2015.
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

2.1
Basis of Preparation
The financial statements of the Group and of the Company have been prepared in accordance with the
Malaysian Financial Reporting Standards (MFRSs), International Financial Reporting Standards and the
requirements of the Companies Act, 1965 in Malaysia.
The financial statements of the Group and of the Company have been prepared under the historical cost
basis, other than as disclosed in the significant accounting policies in Note 2.3 to the financial statements.
The preparation of financial statements in conformity with MFRSs requires the use of certain critical accounting
estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of
contingent assets and liabilities at the date of the financial statements, and the reported amounts of the
revenue and expenses during the reported period. It also requires Directors to exercise their judgement in
the process of applying the Groups and the Companys accounting policies. Although these estimates and
judgement are based on the Directors best knowledge of current events and actions, actual results may
differ.
The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates
are significant to the financial statements are disclosed in Note 3 to the financial statements.

2.2 New MFRSs, Amendments/Improvements to MFRSs and New IC Interpretations (IC Int)
(a)
Adoption of Amendments/Improvements to MFRSs and New IC Int
The Group and the Company had adopted the following amendments/improvements to MFRSs and
new IC Int that are mandatory for the current financial year:Amendments/Improvements to MFRSs
MFRS 10 Consolidated Financial Statements
MFRS 12 Disclosure of Interests in Other Entities
MFRS 127 Separate Financial Statements
MFRS 132 Financial Instruments: Presentation
MFRS 136 Impairment of Assets
MFRS 139 Financial Instruments: Recognition and Measurement

New IC Int
IC Int 21
Levies
The adoption of the above amendments/improvements to MFRSs and new IC Int did not have any
significant effect on the financial statements of the Group and of the Company.
32
Notes to the
Financial Statements (contd)
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

(Continued)
(b)
New MFRSs and Amendments/Improvements to MFRSs that are issued, but not yet effective
and have not been early adopted
The Group and the Company have not adopted the following new MFRSs and amendments/
improvements to MFRSs that have been issued by the Malaysian Accounting Standards Board
(MASB) as at the date of authorisation of these financial statements but are not yet effective for the
Group and the Company:Effective for
financial periods
beginning on
or after
New MFRSs
MFRS 9
Financial Instruments
MFRS 15
Revenue from Contracts with Customers
Amendments/Improvements to MFRSs
MFRS 1
First-time Adoption of Malaysian Financial Reporting Standards
MFRS 2
Share-based Payment
MFRS 7
Financial Instruments: Disclosure
MFRS 8
Operating Segments
MFRS 10
Consolidated Financial Statements
MFRS 11
Joint Arrangements
MFRS 13
Fair Value Measurement
MFRS 101
Presentation of Financial Statements
MFRS 116
Property, Plant and Equipment
MFRS 119
Employee Benefits
MFRS 124
MFRS 127
MFRS 128
MFRS 138
Related Party Disclosures

Separate financial statements
Investments in Associates and Joint Ventures
Intangible Asset
MFRS 140
MFRS 141
Investment Property
Agriculture
1 January 2018
1 January 2017
1 July 2014
1 July 2014
1 January 2016
1 July 2014
1 January 2016
1 January 2016
1 July 2014
1 January 2016
1 July 2014/
1 January 2016
1 July 2014/
1 January 2016
1 July 2014
1 January 2016
1 January 2016
1 July 2014/
1 January 2016
1 July 2014
1 January 2016
A brief discussion on the above significant new MFRSs and amendments/improvements to MFRSs
are summarised below. Due to the complexity of these new standards, the financial effects of their
adoption are currently still being assessed by the Group and the Company.
33
Notes to the
2.

(Continued)
(b)
and have not been early adopted (Continued)
MFRS 9 Financial Instruments
MFRS 9 introduces a package of improvements which includes a classification and measurement

model, a single forward-looking expected loss impairment model and a substantially-reformed
approach to hedge accounting.
Classification and measurement

MFRS 9 introduces an approach for classification of financial assets which is driven by cash flow
characteristics and the business model in which an asset is held. The new model also results in a
single impairment model being applied to all financial instruments.
In essence, if a financial asset is a simple debt instrument and the objective of the entitys business
model within which it is held is to collect its contractual cash flows, the financial asset is measured
at amortised cost. In contrast, if that asset is held in a business model the objective of which is
achieved by both collecting contractual cash flows and selling financial assets, then the financial
asset is measured at fair value in the statement of financial position, and amortised cost information
is provided through profit or loss. If the business model is neither of these, then fair value information
is increasingly important, so it is provided both in the profit or loss and in the statement of financial
position.
Impairment
MFRS 9 introduces a new, expected-loss impairment model that will require more timely recognition
of expected credit losses. Specifically, this Standard requires entities to account for expected credit
losses from when financial instruments are first recognised and to recognise full lifetime expected
losses on a more timely basis. The model requires an entity to recognise expected credit losses at
all times and to update the amount of expected credit losses recognised at each reporting date to
reflect changes in the credit risk of financial instruments. This model eliminates the threshold for the
recognition of expected credit losses, so that it is no longer necessary for a trigger event to have
occurred before credit losses are recognised.
MFRS 15 Revenue from Contracts with Customers
The core principle of MFRS 15 is that an entity recognises revenue to depict the transfer of promised
goods or services to customers in an amount that reflects the consideration to which the entity expects
to be entitled in exchange for those goods or services. An entity recognises revenue in accordance
with the core principle by applying the following steps:

Identify the contracts with a customer.

Identify the performance obligation in the contract.
Determine the transaction price.
Allocate the transaction price to the performance obligations in the contract.
Recognise revenue when (or as) the entity satisfies a performance obligation.
MFRS 15 also includes new disclosures that would result in an entity providing users of financial
statements about the nature, amount, timing and uncertainty of revenue and cash flows from contracts
with customers.
34
Notes to the
2.

(Continued)
(b)
The following MFRSs and IC Interpretations will be withdrawn on the application of MFRS 15:
MFRS 111
MFRS 118
IC Interpretation 13

Construction Contracts
Revenue
Customer Loyalty Programmes
Agreements for the Construction of Real Estate
Transfers of Assets from Customers
Revenue Barter Transactions Involving
Advertising Services
Amendments to MFRS 3 Business Combinations
Amendments to MFRS 3 clarifies that when contingent consideration meets the definition of financial
instrument, its classification as a liability or equity is determined by reference to MFRS132 Financial
Instruments: Presentation. It also clarifies that contingent consideration that is classified as an asset
or a liability shall be subsequently measured at fair value at each reporting date and changes in fair
value shall be recognised in profit or loss.
In addition, amendments to MFRS 3 clarifies that MFRS 3 excludes from its scope the accounting
for the formation of all types of joint arrangements (as defined in MFRS 11 Joint Arrangements) in
the financial statements of the joint arrangement itself.
Amendments to MFRS 7 Financial Instruments: Disclosures
Amendments to MFRS 7 provides additional guidance to clarify whether servicing contracts constitute
continuing involvement for the purposes of applying the disclosure requirements of MFRS 7.
The Amendments also clarify the applicability of Disclosure Offsetting Financial Assets and Financial
Liabilities (Amendments to MFRS 7) to condensed interim financial statements.
Amendments to MFRS 8 Operating Segments
Amendments to MFRS 8 requires an entity to disclose the judgements made by management in

applying the aggregation criteria to operating segments. This includes a brief description of the
operating segments that have been aggregated and the economic indicators that have been assessed
in determining that the aggregated operating segments share similar economic characteristics.
The Amendments also clarifies that an entity shall provide reconciliations of the total of the reportable
segments assets to the entitys assets if the segment assets are reported regularly to the chief
operating decision maker.
Amendments to MFRS 13 Fair Value Measurement
Amendments to MFRS 13 relates to the IASBs Basis for Conclusions which is not an integral part of
the Standard. The Basis for Conclusions clarifies that when IASB issued IFRS 13, it did not remove
the practical ability to measure short-term receivables and payables with no stated interest rate at
invoice amounts without discounting, if the effect of discounting is immaterial.
The Amendments also clarifies that the scope of the portfolio exception of MFRS 13 includes all
contracts accounted for within the scope of MFRS 139 Financial Instruments: Recognition and
Measurement or MFRS 9 Financial Instruments, regardless of whether they meet the definition of
financial assets or financial liabilities as defined in MFRS132 Financial Instruments: Presentation.
35
Notes to the
2.

(Continued)
(b)
Amendments to MFRS 101 Presentation of Financial Statements
Amendments to MFRS 101 improves the effectiveness of disclosures. The Amendments clarifies
guidance on materiality and aggregation, the presentation of subtotals, the structure of financial
statements and the disclosure of accounting policies.
Amendments to MFRS 116 Property, Plant and Equipment
Amendments to MFRS 116 clarifies the accounting for the accumulated depreciation/amortisation
when an asset is revalued. It clarifies that:

the gross carrying amount is adjusted in a manner that is consistent with the revaluation of the
carrying amount of the asset; and
the accumulated depreciation / amortisation is calculated as the difference between the gross
carrying amount and the carrying amount of the asset after taking into account accumulated
impairment losses.
Amendments to MFRS 116 prohibits revenue-based depreciation because revenue does not reflect
the way in which an item of property, plant and equipment is used or consumed.
Amendments to MFRS 124 Related Party Disclosures
Amendments to MFRS 124 clarifies that an entity providing key management personnel services to
the reporting entity or to the parent of the reporting entity is a related party of the reporting entity.
Amendments to MFRS 127 Separate Financial Statements
Amendments to MFRS 127 allows a parent and investors to use the equity method in its separate
financial statements to account for investments in subsidiaries, joint ventures and associates, in
addition to the existing options.
Amendments to MFRS 138 Intangible Assets
Amendments to MFRS 138 introduces a rebuttable presumption that the revenue-based amortisation
method is inappropriate (for the same reasons as per the Amendments to MFRS 116). This presumption
can be overcome only in the limited circumstances:
in which the intangible asset is expressed as a measure of revenue, i.e. in the circumstance in
which the predominant limiting factor that is inherent in an intangible asset is the achievement
of a revenue threshold; or
when it can be demonstrated that revenue and the consumption of the economic benefits of
the intangible asset are highly correlated.
36
Notes to the
2.

(Continued)
2.3
(b)
Amendments to MFRS 10 Consolidated Financial Statements and MFRS 128 Investments

in Associates and Joint Ventures
These Amendments address an acknowledged inconsistency between the requirements in MFRS 10

and those in MFRS 128, in dealing with the sale or contribution of assets between an investor and
its associate or joint venture.
The main consequence of the Amendments is that a full gain or loss is recognised when a transaction
involves a business (whether it is housed in a subsidiary or not), as defined in MFRS 3 Business
Combinations. A partial gain or loss is recognised when a transaction involves assets that do not
constitute a business, even if these assets are housed in a subsidiary.
Amendments to MFRS 10 Consolidated Financial Statements, MFRS 12 Disclosures of

Interests in Other Entities and MFRS 128 Investments in Associates and Joint Ventures
These Amendments addresses the following issues that have arisen in the application of the
consolidation exception for investment entities:
Exemption from presenting consolidated financial statements:- the Amendments clarifies that
the exemption from presenting consolidated financial statements applies to a parent entity that
is a subsidiary of an investment entity, when the investment entity measures all of its subsidiaries
at fair value.
Consolidation of intermediate investment entities:- the Amendments clarifies that only a

subsidiary is not an investment entity itself and provides support services to the investment
entity is consolidated. All other subsidiaries of an investment entity are measured at fair value.
Policy choice for equity accounting for investments in associates and joint ventures:- the
Amendments allows a non-investment entity that has an interest in an associate or joint
venture that is an investment entity, when applying the equity method, to retain the fair value
measurement applied by the investment entity associate or joint venture to its interest in
subsidiaries, or to unwind the fair value measurement and instead perform a consolidation at
the level of the investment entity associate or joint venture.
Significant Summary of Accounting Policies

(a)
Basis of Consolidation
(i)
Subsidiary Companies
The consolidated financial statements comprise the financial statements of the Company
and its subsidiaries as at 31st December 2014. The financial statements of the subsidiary
companies used in the preparation of the consolidated financial statements are prepared for
the same reporting period date as the Company. Consistent accounting policies are applied
to like transactions and events in similar circumstances.
All intra-group balances, income and expense and unrealised gains and losses resulting from
intra-group transactions are eliminated in full.
37
Notes to the
2.

2.3
Significant Summary of Accounting Policies (Continued)

(a)
Basis of Consolidation (Continued)

(i)
Subsidiary Companies (Continued)
Control is achieved when the Group is exposed, or has rights, to variable returns from its
involvement with the investee and has the ability to affect those returns through its power over
the investee. Specifically, the Group controls an investee if and only if the Group has:-
Power over the investee (i.e. existing rights that give it the current ability to direct the
relevant activities of the investee);
Exposure, or rights, to variable returns from its involvement with the investee, and
The ability to use its power over the investee to affect its returns
When the Group has less than a majority of the voting or similar rights of an investee, the
Group considers all relevant facts and circumstances in assessing whether it has power over
an investee, including:

The contractual arrangement with the other vote holders of the investee;
Rights arising from other contractual arrangements;
The Groups voting rights and potential voting rights.
Profit or loss and each component of other comprehensive income (OCI) are attributed to the
equity holders of the parent of the Group and to the non-controlling interests, even if this results
in the non-controlling interests having a deficit balance. When necessary, adjustments are
made to the financial statements of subsidiaries to bring their accounting policies into line with
the Groups accounting policies. All intra-group assets and liabilities, equity, income, expenses
and cash flows relating to transactions between members of the Group are eliminated in full
on consolidation.
A change in the ownership interest of a subsidiary, without a loss of control, is accounted for
as an equity transaction. If the Group losts control over a subsidiary, it:

Derecognises the assets (including goodwill) and liabilities of the subsidiary;
Derecognises the carrying amount of any non-controlling interests;
Derecognises the cumulative translation differences recorded in equity;
Recognises the fair value of the consideration received;
Recognises the fair value of any investment retained;
Recognises any surplus or deficit in profit or loss; and
Reclassifies the parents share of components previously recognised in OCI to profit or

loss or retained earnings, as appropriate, as would be required if the Group had directly
disposed of the related assets or liabilities.
38
Notes to the
2.

2.3

(a)
Basis of Consolidation (Continued)

(ii)
Business Combination and Goodwill
Business combinations are accounted for using the acquisition method. The cost of an
acquisition is measured as the aggregate of the consideration transferred measured at
acquisition date fair value and the amount of any non-controlling interests in the acquiree. For
each business combination, the Group elects whether to measure the non-controlling interests
in the acquiree at fair value or at the proportionate share of the acquirees identifiable net assets.
Acquisition-related costs are expensed as incurred and included in administrative expenses.
When the Group acquires a business, it assesses the financial assets and liabilities assumed for
appropriate classification and designation in accordance with the contractual terms, economic
circumstances and pertinent conditions as at the acquisition date. This includes the separation
of embedded derivatives in host contracts by the acquiree.
If the business combination is achieved in stages, any previously held equity interest is remeasured at its acquisition date fair value and any resulting gain or loss is recognised in profit
or loss. It is then considered in the determination of goodwill.
Any contingent consideration to be transferred by the acquirer will be recognised at fair value
at the acquisition date. Contingent consideration classified as an asset or liability that is a
financial instrument and within the scope of MFRS 139 Financial Instruments: Recognition and
Measurement, is measured at fair value with changes in fair value recognised either in either
profit or loss or as a change to OCI. If the contingent consideration is not within the scope of
MFRS 139, it is measured in accordance with the appropriate MFRS. Contingent consideration
that is classified as equity is not re-measured and subsequent settlement is accounted for
within equity.
Goodwill is initially measured at cost, being the excess of the aggregate of the consideration
transferred and the amount recognised for non-controlling interests, and any previous interest
held, over the net identifiable assets acquired and liabilities assumed. If the fair value of the net
assets acquired is in excess of the aggregate consideration transferred, the Group re-assesses
whether it has correctly identified all of the assets acquired and all of the liabilities assumed
and reviews the procedures used to measure the amounts to be recognised at the acquisition
date. If the re-assessment still results in an excess of the fair value of net assets acquired over
the aggregate consideration transferred, then the gain is recognised in profit or loss.
After initial recognition, goodwill is measured at cost less any accumulated impairment losses.
For the purpose of impairment testing, goodwill acquired in a business combination is, from the
acquisition date, allocated to each of the Groups cash-generating units that are expected to
benefit from the combination, irrespective of whether other assets or liabilities of the acquiree
are assigned to those units.
Where goodwill has been allocated to a cash-generating unit and part of the operation within
that unit is disposed of, the goodwill associated with the disposed operation is included in
the carrying amount of the operation when determining the gain or loss on disposal. Goodwill
disposed in these circumstances is measured based on the relative values of the disposed
operation and the portion of the cash-generating unit retained.
39
Notes to the
2.

2.3

(b)
Investment in Associates
Associate companies are entities, including unincorporated entities, in which the Group has significant
influence, but not control, over the financial and operating policies.
Investments in associate companies are accounted for in the consolidated financial statements using
the equity method less any impairment losses, unless it is classified as held for sale. The cost of the
investment includes transaction costs. The consolidated financial statements include the Groups share
of the profit or loss and other comprehensive income of the associate companies, after adjustments
if any, to align the accounting policies with those of the Group, from the date that significant influence
commences until the date that significant influence ceases.
When the Groups share of losses exceeds its interest in an associate company, the carrying amount
of that interest including any long-term investments is reduced to zero, and the recognition of further
losses is discontinued except to the extent that the Group has an obligation or has made payments
on behalf of the associate company.
When the Group ceases to have significant influence over an associate company, any retained interest
in the former associate company at the date when significant influence is lost is measured at fair
value and this amount is regarded as the initial carrying amount of a financial asset. The difference
between the fair value of any retained interest plus proceeds from the interest disposed of and the
carrying amount of the investment at the date when equity method is discontinued is recognised in
the profit or loss.
When the Groups interest in an associate company decreases but does not result in a loss of
significant influence, any retained interest is not re-measured. Any gain or loss arising from the
decrease in interest is recognised in profit or loss. Any gains or losses previously recognised in other
comprehensive income are also reclassified proportionately to the profit or loss if that gain or loss
would be required to be reclassified to profit or loss on the disposal of the related assets or liabilities.
Investments in associate companies are measured in the Groups statements of financial position at
cost less any impairment losses, unless the investment is classified as held for sale or distribution.
The results of the associate company, Shan Dong Yingerle Hwa Tai Food Industry Co. Ltd. (the
associate company), is accounted for in the consolidated financial statements based on the audited
financial statements of the associate company made up from 1st January 2014 to 31st December
2014 and is prepared using accounting policies that conform to those used by the Group for like
transactions in similar circumstances.
(c)
Non-controlling interest
Non-controlling interests at the end of the financial year, being the equity in a subsidiary company
not attributable directly or indirectly to the equity holders of the Company, are presented in the
consolidated statement of financial position and consolidated statement of changes in equity within
equity, separately from equity attributable to the owners of the Company. Non-controlling interests in
the results of the Group is presented in the consolidated statement of comprehensive income as an
allocation of the profit or loss and the comprehensive income for the year between non-controlling
interests and the owners of the Company.
(d)
Transactions Eliminated on Consolidation
Unrealised gains arising from transactions with equity accounted associate companies are eliminated
against the investment to the extent of the Groups interest in the investees. Unrealised losses are
eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of
impairment.
40
Notes to the
2.

2.3

(e)
Property, Plant and Equipment and Depreciation
Property, plant and equipment are stated at cost less accumulated depreciation and impairment
loss, if any except for freehold land. The policy of recognition of impairment losses is in accordance
with Note 2.3(o) to the financial statements. Cost includes expenditure that is directly attributable to
the acquisition of the asset. When significant parts of an item of property, plant and equipment have
different useful lives, they are accounted for as separate items of property, plant and equipment.
The cost of replacing part of an item of property, plant and equipment is recognised in the carrying
amount of the item if it is probable that the future economic benefits embodied within the part will
flow to the Group and its cost can be measured reliably. The costs of the day-to-day servicing of
property, plant and equipment are recognised in the profit or loss as incurred.
No depreciation is provided on the freehold land as it has infinite useful life. Capital work-in-progress will
be depreciated when the property, plant and equipment are ready for their intended use. Depreciation
of other property, plant and equipment is provided on the straight line basis to write off the cost or
valuation of each asset to its residual value over their estimated useful life at the following rates:Leasehold land and buildings
2%
Renovation 10%
Plant and machinery
5% - 10%
Office equipment, furniture and fittings and motor vehicles
10% - 20%
The residual values, useful life and depreciation method are reviewed at each financial year end to
ensure that the amount, method and period of depreciation are consistent with previous estimates
and the expected pattern of consumption of the future economic benefits embodied in the items of
property, plant and equipment.
Fully depreciated assets are retained in the accounts until the assets are no longer in use.
An item of property, plant and equipment is derecognised upon disposal or when no future economic
benefits are expected from its use or disposal. The difference between the net disposals proceeds
and the net carrying amount, if any, is recognised in the profit or loss.
(f) Inventories

Inventories are stated at the lower of cost and net realisable value, cost being determined on the firstin, first-out basis. Net realisable value is the estimated selling price in the ordinary course of business
less the estimated costs of completion and the estimated costs necessary to make the sale.
Raw materials, packing materials and consumable stores comprise purchase price and carriage
costs. Cost of manufactured finished goods and work-in-progress include direct materials, direct
labour and an allocation of manufacturing overheads.
(g)
Financial Instruments
Financial instruments are recognised in the statements of financial position when, and only when, the
Group and the Company become a party to the contract provisions of the financial instruments.
A financial instrument is recognised initially, at its fair value, plus, in the case of a financial instrument
not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition
or issue of the financial instrument.
41
Notes to the
2.

2.3

(g)

Financial Instruments (Continued)

The Group and the Company categorise the financial instruments as follows:(i)
Financial Assets
Financial assets at fair value through profit or loss
Derivatives that are linked to and must be settled by delivery of unquoted equity instruments
whose fair values cannot be reliably measured are measured at cost.
Other financial assets categorised as fair value through profit or loss are subsequently measured
at their fair values with the gain or loss recognised in profit or loss.
Loans and receivables
Loans and receivables category comprises debt instruments that are not quoted in an active
market.
Financial assets categorised as loans and receivables are subsequent measured at amortised
cost using the effective interest method.
Held-to-maturity investments
Held-to-maturity investments category comprises debt instruments that are quoted in an active
market and the Group or the Company has the positive intention and ability to hold them to
maturity.
Financial assets categorised as held-to-maturity investments are subsequently measured at

amortised cost using the effective interest method.
Available-for-sale financial assets
Available-for-sale category comprises investment in equity and debt securities instruments that
are not held for trading.
Investments in equity instruments that do not have a quoted market price in an active market
and whose fair value cannot be reliably measured are measured at cost. Other financial assets
categorised as available-for-sale are subsequently measured at their fair values with the gain or
loss recognised in other comprehensive income, except for impairment losses, foreign exchange
gains and losses arising from monetary items and gains and losses of hedged items attributable
to hedge risk of fair value hedges which are recognised in profit or loss. On derecognition, the
cumulative gain or loss recognised in other comprehensive income is reclassified from equity
into profit or loss. Interest calculated for a debt instrument using the effective interest method
is recognised in profit or loss.
All financial assets, except for those measured at fair value through profit or loss, are subject
to review for impairment.
Fair value through profit or loss category comprises financial assets that are held for trading,
including derivatives (except for a derivative that is a financial guarantee contract or a designated
and effective hedging instrument) or a financial assets that are specifically designated into this
category upon initial recognition.
42
Notes to the
2.

2.3

(g)
Financial Instruments (Continued)

(ii)
Financial Liabilities
All financial liabilities are subsequently measured at amortised cost other than those categorised
as fair value through profit or loss.
Fair value through profit or loss category comprises financial liabilities that are derivatives (except
for a derivative that is a financial guarantee contract or a designated and effective hedging
instrument) or financial liabilities that are specifically designated into this category upon initial
recognition.
Derivatives that are linked to and must be settled by delivery of equity instruments that do not
have a quoted price in an active market for identical instruments whose fair values otherwise
cannot be reliably measured are measured at cost.
Other financial liabilities categorised as fair value through profit or loss are subsequently measured
at their fair values with the gain or loss recognised in profit or loss.
(iii)
Financial Guarantee Contracts
A financial guarantee contract is a contract that requires the issuer to make specified payments
to reimburse the holder for a loss it incurs because a specified debtor fails to make payment
when due in accordance with the original or modified terms of a debt instrument.
Fair value arising from financial guarantee contracts are classified as deferred income and is
amortised to profit or loss using a straight-line method over the contractual period or, when
there is no specified contractual period, recognised in profit or loss upon discharge of the
guarantee. When settlement of a financial guarantee contract becomes probable, an estimate
of the obligation is made. If the carrying value of the financial guarantee contract is lower than
the obligation, the carrying value is adjusted to the obligation amount and accounted for as a
provision.
(iv) Derecognition

A financial asset or part of it is derecognised when, and only when the contractual rights to the
cash flows from the financial asset expire or the financial asset is transferred to another party
without retaining control or substantially all risks and rewards of the asset. On derecognition of
a financial asset, the difference between the carrying amount and the sum of the consideration
received (including any new asset obtained less any new liability assumed) and any cumulative
gain or loss that had been recognised in equity is recognised in profit or loss.
A financial liability or part of it is derecognised when, and only when, the obligation specified in
the contract is discharged or cancelled or expires. On derecognition of a financial liability, the
difference between the carrying amount of the financial liability extinguished or transferred to
another party and the consideration paid, including any non-cash assets transferred or liabilities
assumed, is recognised in profit or loss.
43
Notes to the
2.

2.3

(h) Leases
(i)
Finance Leases
Leases of property, plant and equipment where the Group assumes substantially all the benefits
and risks of ownership are classified as finance leases.
Assets acquired by way of hire purchase or finance leases are stated at an amount equal to the
lower of their fair values and the present value of the minimum lease payments at the inception
of the leases, less accumulated depreciation and impairment losses, if any. The corresponding
liability is included in the statement of financial position as borrowings. In calculating the present
value of the minimum lease payments, the discount factor used in the interest rate implicit in
the lease, when it is practicable to determine; otherwise, the Groups incremental borrowings
rate is used. Any initial direct costs are also added to the carrying amount of such assets.
Lease payments are apportioned between the finance costs and the reduction of the outstanding
liability. Finance costs, which represent the difference between the total leasing commitments
and the fair value of the assets acquired, are recognised in the profit or loss over the term of
the relevant lease so as to produce a constant periodic rate of charge on the remaining balance
of the obligations for each accounting period.
The depreciation policy for leased assets is in accordance with that for depreciable property,
plant and equipment as described in Note 2.3(e) to the financial statements.
(ii) Operating Leases

Leases of assets where a significant portion of the risks and rewards of ownership are retained
by the lessor are classified as operating leases.

Operating lease payments are recognised as an expense on a straight-line basis over the term
of the relevant lease. The aggregate benefit of incentives provided by the lessor is recognised
as a reduction of rental expense over the lease term on a straight-line basis.
(i)
Borrowing Costs
Borrowings are initially recognised based on the proceeds received, net of transaction costs incurred.
In the subsequent periods, borrowings are stated at amortised cost using the effective yield method;
any difference between proceeds (net of transaction costs) and the redemption value is recognised
in the profit or loss over the period of the borrowings.
Interest, dividends, losses and gains relating to a financial instrument, or a component part classified
as a liability is reported within finance cost in the profit or loss.
Borrowings are classified as current liabilities unless the Group has an unconditional right to defer
settlement of the liability for at least 12 months after the reporting date.
44
Notes to the
2.

2.3

(j)
Employee benefits
(i)
Short term employee benefits

Wages, salaries, social security contribution, bonuses and non-monetary benefits are accrued
in the period in which the associated services are rendered by the employees. Short-term
accumulating compensated absences such as paid annual leave are recognised when services
are rendered by employees that increase their entitlement to future compensated absences.
Short term non-accumulating compensated absences sick leave, maternity and paternity leave
are recognised when absences occur.
(k)
(ii)
Post-employment benefits
The Group contributes to the Employees Provident Fund, the national defined contribution
plan. The contributions are charged to the profit or loss in the period to which they are related.
Once the contributions have been paid, the Group has no further payment obligations.
Foreign Currencies
(i)
Functional and presentation currency
The individual financial statements of each entity in the Group are measured using the functional
currency which is the currency of the primary economic environment in which the entity operates.
The consolidated financial statements are presented in Ringgit Malaysia (RM), which is also the
Companys functional currency.
(ii)
Foreign currency transactions and translations
Transactions in foreign currencies are translated to Ringgit Malaysia at exchange rates ruling
at the transaction date. Monetary assets and liabilities in foreign currencies at the statement of
financial position are translated into Ringgit Malaysia (RM) at the rates ruling at the reporting
date. All exchange differences are included in the profit or loss.
Non-monetary items are measured in term of historical cost in a foreign currency or translated
using the exchange rates as at the date of the initial transaction. Non-monetary items measured
at fair value in foreign currency are translated using the exchange rates at the date when the
fair value was determined.
(iii)
Foreign operations
The results and financial position of all the group entities (none of which has the currency of
a hyperinflationary economy) that have a functional currency different from the presentation
currency are translated into the presentation currency as follows:

assets and liabilities for each statement of financial position presented are translated at
the closing rate at the date of that statement of financial position;
income and expenses for each statement of comprehensive income are translated at
average exchange rates (unless this average is not a reasonable approximation of the
cumulative effect of the rates prevailing on the transaction dates, in which case income
and expenses are translated at the rate on the dates); and
all resulting exchange differences are recognised as a separate component of equity.
On consolidation, exchange differences arising from the translation of the net investment in
foreign operations are taken to other comprehensive income.
45
Notes to the
2.

2.3

(l) Provision

Provision are recognised when the Group has a present obligation (legal or constructive) as a result of
a past event, it is probable that an outflow of resources embodying economic benefits will be required
to settle the obligation and the amount of the obligation can be estimated reliably.
Provisions are reviewed at the end of each reporting period and adjusted to reflect the current best
estimate. If it is no longer probable that an outflow of economic resources will be required to settle the
obligation, the provision is reversed. If the effect at the time value of money is material, provisions are
discounted using current pre-tax rate that reflects, where appropriate, the risk specific to the liability.
When discounting is used, the increase in the provision due to the passage of time is recognised as
finance cost.
(m) Taxation

The tax expense in the profit or loss represents the aggregate amount of current and deferred tax.
Current tax is the expected amount of income taxes payable in respect of the taxable profit for the
year and is measured using the tax rates that have been enacted at the reporting date.
Deferred tax is provided for, using the liability method, on temporary differences at the reporting date
arising between the tax bases of assets and liabilities and their carrying amounts in the financial
statements. In principle, deferred tax liabilities are recognised for all taxable temporary differences
and deferred tax assets are recognised for all deductible temporary differences, unused tax losses
and unused tax credits to the extent that it is probable that taxable profit will be available against
which the deductible temporary differences, unused tax losses and unused tax credit can be utilised.
Deferred tax is not recognised if the temporary difference arises from goodwill or negative goodwill or
from the initial recognition of an asset or liability in a transaction which is not a business combination
and at time of the transaction, affects neither accounting profit nor taxable profit.
Deferred tax is measured at the tax rates that are expected to apply in the period when the asset is
realised or the liability is settled, based on tax rates that have been enacted or substantively enacted
at the reporting date. Deferred tax is recognised in the profit or loss, except when it arises from
transaction which is recognised in other comprehensive income or directly in equity, in which case
the deferred tax is also charged or credited in other comprehensive income or directly in equity or
when it arises from a business combination that is an acquisition, in which case the deferred tax is
included in the resulting goodwill or bargain purchased.

(n) Revenue Recognition

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the
Group and the revenue can be reliably measured.

Revenue from sale of goods is measured at the fair value of the consideration receivable and is
recognised in the profit or loss when the significant risks and rewards of ownership have been
transferred to the buyer.
Rental income is accounted for on a straight-line basis over the lease terms. The aggregate cost of
incentives provided to lessees are recognised as a reduction of rental income over the lease term on
a straight-line basis.
Interest income is recognised using the effective interest rate method.
46
Notes to the
2.

2.3

(o)
Impairment of Assets

(i)
Impairment of Financial Assets
All financial assets (except for financial assets categorised as fair value through profit or loss,
investment in subsidiary companies and associate company) are assessed at each reporting
date whether there is any objective evidence of impairment as a result of one or more events
having an impact on the estimated future cash flows of the asset. Losses expected as a result
of future events, no matter how likely, are not recognised. For an equity instrument, a significant
or prolonged decline in the fair value below its cost is an objective evidence of impairment.
An impairment loss in respect of loans and receivables and held-to-maturity investments is

recognised in profit or loss and is measured as the difference between the assets carrying
amount and the present value of estimated future cash flows discounted at the assets original
effective interest rate. The carrying amount of the asset is reduced through the use of an
allowance account.
An impairment loss in respect of available-for-sale financial assets is recognised in the profit

or loss and is measured as the difference between the assets acquisition cost (net of any
principal repayment and amortisation) and the assets current fair value, less any impairment
loss previously recognised. Where a decline in the fair value of an available-for-sale financial
asset has been recognised in the other comprehensive income, the cumulative loss in other
comprehensive income is reclassified from equity and recognised to profit or loss.
An impairment loss in respect of unquoted equity instrument that is carried at cost is recognised
in profit or loss and is measured as the difference between the assets carrying amount and the
present value of estimated future cash flows discounted at the current market rate of return for
a similar financial asset.
Impairment losses recognised in profit or loss for an investment in an equity instrument is not
reversed through the profit or loss.
If, in a subsequent period, the fair value of a debt instrument increases and the increase can be
objectively related to an event occurring after the impairment loss was recognised in profit or
loss, the impairment loss is reversed, to the extent that the assets carrying amount does not
exceed what the carrying amount would have been had the impairment not been recognised
at the date the impairment is reversed. The amount of the reversal is recognised in the profit
or loss.
(ii)
Impairment of Non-financial Assets
The Group and the Company assess at each reporting date whether there is an indication
that an asset may be impaired. If any such indication exists, or when an annual impairment
assessment for an asset is required, the Group and the Company make an estimate of the
assets recoverable amount.
For goodwill that has an indefinite useful life and are not available for use, the recoverable
amount is estimated at each reporting date or more frequently when indicators of impairment
are identified.
47
Notes to the
2.

2.3

(o)
Impairment of Assets (Continued)

(ii)
Impairment of Non-financial Assets (Continued)
An assets recoverable amount is the higher of an assets or CGUs fair value less cost to sell
and its value in use. In assessing value in use, the estimated future cash flows are discounted
to their present value using a pre-tax discount rate that reflects current market assessments
of the time value of money and the risk specific to the asset. Where the carrying amounts of
an asset exceed its recoverable amount, the asset is considered impaired and is written down
to its recoverable amount. Impairment losses recognised in respect of a CGU or groups of
CGUs are allocated first to reduce the carrying amount of any goodwill allocated to those units
or groups of units and then, to reduce the carrying amount of the other assets in the unit or
groups of units on a pro-rata basis.
An impairment loss is recognised in the profit or loss in the period in which it arises.
Impairment loss on goodwill is not reversed in a subsequent period. An impairment loss for an
asset other than goodwill is reversed if, and only if, there has been a change in the estimates
used to determine the assets recoverable amount since the last impairment was recognised.
The carrying amount of an asset other than goodwill is increased to its revised recoverable
amount, provided that this amount does not exceed its carrying amount that would have been
determined (net of amortisation or depreciation) had no impairment loss been recognised for the
asset in prior years. A reversal of impairment loss for an asset other than goodwill is recognised
in the profit or loss.
(p)
Cash and Cash Equivalents
For the purpose of statement of cash flow, cash and cash equivalents comprise cash in hand, bank
balances, demand deposits and other short term, highly liquid investments that are readily convertible
to known amounts of cash and which are subject to an insignificant risk of changes in value. Cash
and cash equivalents are stated net of bank overdrafts which are repayable on demand.
(q)
Equity Instruments
Ordinary shares are recorded at the nominal value and the consideration in excess of nominal value
of shares issued, if any, is accounted for as share premium. Both ordinary shares and share premium
are classified as equity.
Dividends on ordinary shares are recognised as liabilities when proposed or declared before the
reporting date. A dividend proposed or declared after the reporting date, but before the financial
statements are authorised for issue, is not recognised as a liability at the reporting date.
Cost incurred directly attributable to the issuance of the shares are accounted for as a deduction
from share premium, if any, otherwise it is charged to the profit or loss. Equity transaction costs
comprise only those incremental external costs directly attributable to the equity transaction which
would otherwise have been avoided.

(r)

Segmental Reporting
An operating segment is a component of the Group that engages in business activities from which it
may earn revenues and incur expenses, including revenues and expenses that relate to transactions
with any of the Groups other components. An operating segments operating results are reviewed
regularly by the chief operating decision maker, to make decisions about resources to be allocated
to the segment and assess its performance, and for which discrete financial information is available.
48
Notes to the
2.

2.3
3.

(s)
Fair Value Measurements
Fair value of an asset or a liability, except for share-based payment and lease transactions, is
determined as the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date. The measurement assumes that
the transaction to sell the asset or transfer the liability takes place either in the principal market or in
the absence of a principal market, in the most advantageous market.
For non-financial asset, the fair value measurement takes into account a market participants ability to
generate economic benefits by using the asset in its highest and best use or by selling it to another
market participant that would use the asset in its highest and best use.
SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGEMENTS

3.1
Critical judgements in applying the Companys accounting policies
In the process of applying the Groups and the Companys accounting policies, which are described in Note
2.3 above, the management has made the following judgement, apart from those involving estimations,
which have a significant effect on the amounts recognised in the financial statements:-
Classification between operating lease and finance lease for leasehold land
The Group has developed certain criteria based on MFRS 117 Leases in making judgement whether a
leasehold land should be classified either as operating lease or finance lease.
Finance lease is a lease that transfers substantially all the risks and rewards incidental to ownership of an
assets and operating lease is a lease that does not transfer substantially all the risks and rewards incidental
to ownership. If the leasehold land meets the criteria of the financial lease, the lease will be classified as
property, plant and equipment if it is for own use. Judgements are made on the individual leasehold land
to determine whether the leasehold land qualifies as operating lease or finance lease.
The Group has classified the leases period of more than 50 years as finance leases as they have met the
criteria of a finance lease under MFRS 117.
3.2
Key sources of estimation uncertainty
The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting
date, that have a significant risk of causing a material judgement to the carrying amounts of assets and
liabilities within the next financial year are as stated below:(i)
Useful lives of property, plant and equipment (Note 4)
The Group and the Company estimate the useful lives of property, plant and equipment based on
period over which the assets are expected to be available for use. The estimated useful lives of
property, plant and equipment are reviewed periodically and are updated if expectation differs from
previous estimates due to physical wear and tear, technical or commercial obsolescence and legal
or other limits on the use of the relevant assets. In addition, the estimation of useful lives of property,
plant and equipment are based on internal technical evaluation and experience with similar assets.
It is possible, however, that future results of operations could be materially affected by changes in
the estimates brought about by changes in factors mentioned above. The amounts and timing of
recorded expenses for any period would be affected by changes in these factors and circumstances.
A reduction in estimated useful lives of the property, plant and equipment would increase the recorded
expenses and decrease the non-current assets.
49
Notes to the
3.
SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGEMENTS (Continued)

3.2
Key sources of estimation uncertainty (Continued)

(ii)
Impairment of investment in subsidiary companies and recoverability of amount owing by

subsidiary companies (Note 6)
The Company tests investment in subsidiary companies and amount owing by subsidiary companies
for impairment in accordance with its accounting policy. The assessment of the net tangible assets of
the subsidiary companies affects the result of the impairment test. Costs of investments in subsidiary
companies which have ceased operations were impaired up to net assets of the subsidiary companies.
The impairment made on investment in subsidiary companies entails an impairment to be made to
the amount owing by these subsidiary companies.
Significant judgement is required in the estimation of the present value of future cash flows to be
generated by the subsidiary companies, which involve uncertainties and are significantly affected by
assumptions used and judgement made regarding estimates of future cash flows and discount rates.
Changes in assumptions could significantly affect the results of the Companys tests for impairment
of investment in subsidiary companies and amount owing by subsidiary companies.
(iii)
Impairment of investment in associated company (Note 7)
The Group and the Company test investment in associated company for impairment annually in
accordance with its accounting policy. More regular reviews are performed if events indicate that this
is necessary.
Significant judgement is required in the estimation of the present value of future cash flows generated
by the associated company, which involve uncertainties and are significantly affected by assumptions
used and judgement made regarding estimates of future cash flows and discount rates. Changes
in assumptions could significantly affect the results of the Groups and the Companys tests for
impairment of investment in associate company.
(iv)
Impairment of property, plant and equipment (Note 4)
The Group and the Company review the carrying amount of its property, plant and equipment,
to determine whether there is an indication that those assets have suffered an impairment loss in
accordance with relevant accounting policies on the property, plant and equipment. Independent
professional valuations to determine the carrying amount of these assets will be procured when the
need arise.
As at the end of the financial years under review, the directors are of the view that there is no indication
of impairment to these assets and therefore no independent professional valuation was procured by
the Group during the financial year to determine the carrying amount of these assets. The carrying
amounts of property, plant and equipment are disclosed in Note 4 to the financial statements.
(v)
Allowance for write down in inventories (Note 8)
Reviews are made periodically by management on damaged, obsolete and slow-moving inventories.
These reviews require judgement and estimates. Possible changes in these estimates can result in
revisions to the valuation of inventories.
50
Notes to the
3.
SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGEMENTS (Continued)

3.2
Key sources of estimation uncertainty (Continued)

(vi)
Impairment of receivables (Note 9)
The Group assesses at each reporting date whether there is any objective evidence that a financial
asset is impaired. To determine whether there is objective evidence of impairment, the Group considers
factors such as the probability of insolvency or significant financial difficulties of the debtor and default
or significant delay in payments.
Where there is objective evidence of impairment, the amount and timing of future cash flows are
estimated based on historical loss experience for assets with similar credit risk characteristics. The
carrying amount of the Groups receivable at the reporting date is disclosed in Note 9 to the financial
statements.
(vii) Taxation (Note 17)

Significant judgement is required in determining the capital allowances and deductibility of certain
expenses during the estimation of the provision for income taxes. There are many transactions and
calculations for which the ultimate tax determination is uncertain during the course of business. Where
the final tax outcome of these matters is different from the amounts that were initially recorded, such
differences will impact the income tax and deferred income tax provisions in the period in which such
determination is made.
4.
8,877,654
301,021
(1,350)
9,177,325
3,707,130
324,633
(45)
4,031,718
5,145,607
Cost
At 1st January 2014
Additions
Disposals/write-offs
Accumulated Depreciation
At 1st January 2014
Depreciation for the financial year
Net Book Value at

31st December 2014
8,672,239
29,943,425
29,347,442
1,456,530
(860,547)
38,615,664
39,109,450
376,807
(870,593)
260,155
3,206,812
3,156,116
60,309
(9,613)
3,466,967
3,398,596
77,984
(9,613)
35,588
556,371
547,785
8,586

591,959
590,079
1,880

645,381
979,525
864,931
114,594

1,624,906
1,624,906

560,549
560,549

560,549

Plant Furniture Capital

and
Office
and Motor Work-inGroup
Properties #
Machinery
Equipment
Fittings
Vehicles
progress
2014
RM
RM
RM
RM
RM
RM
PROPERTY, PLANT AND EQUIPMENT
15,319,519
38,717,851
37,623,404
1,964,652
(870,205)
54,037,370
53,600,685
1,318,241
(881,556)
Total
RM
51
Notes to the
4.
8,640,569
237,085

8,877,654
3,414,990
292,140

3,707,130
5,170,524
Cost
At 1st January 2013
Additions
At 1st January 2013
Net Book Value at

31st December 2013
9,762,008
29,347,442
30,568,929
1,453,592
(2,675,079)
39,109,450
41,399,087
411,837
(2,701,474)
242,480
3,156,116
3,125,444
61,863
(31,191)
3,398,596
3,340,814
90,881
(33,099)
42,294
547,785
535,443
12,342

590,079
584,279
5,800

759,975
864,931
925,403
100,958
(161,430)
1,624,906
1,529,536
256,800
(161,430)

Plant Furniture

and
Office
and Motor
Group Properties #
Machinery
Equipment
Fittings
Vehicles
2013
RM
RM
RM
RM
RM
PROPERTY, PLANT AND EQUIPMENT (Continued)
15,977,281
37,623,404
38,570,209
1,920,895
(2,867,700)
53,600,685
55,494,285
1,002,403
(2,896,003)
Total
RM
52
Notes to the
53
Notes to the
4.

# Properties consist of: Freehold Leasehold

Land and
Land and
Group Buildings Buildings Renovation
Total
2014
RM RM RM RM
Cost
At 1st January 2014
Additions
132,515

7,731,963

1,013,176
301,021
(1,350)
8,877,654
301,021
(1,350)
132,515
7,731,963
1,312,847
9,177,325
At 1st January 2014
3,382,894
219,147

324,236
105,486
(45)
3,707,130
324,633
(45)
3,602,041
429,677
4,031,718
Net Book Value at

31st December 2014
132,515
4,129,922
883,170
5,145,607
Freehold Leasehold

Land and
Land and
Group Buildings Buildings Renovation
Total
2013
RM RM RM RM
Cost
At 1st January 2013
Additions
132,515

7,731,963

776,091
237,085
8,640,569
237,085
132,515
7,731,963
1,013,176
8,877,654
At 1st January 2013

3,163,745
219,149
251,245
72,991
3,414,990
292,140
3,382,894
324,236
3,707,130
Net Book Value at

31st December 2013
132,515
4,349,069
688,940
5,170,524
Leasehold land has remaining unexpired lease period of more than 50 years.
54
Notes to the
4.

Company
Properties #
2014
RM
Plant Furniture
Capital
and
Office
and
Motor Work-inMachinery Equipment
Fittings Vehicles progress
RM
RM
RM
RM
RM
Cost
At 1st January 2014
Additions
7,483,514
301,021
(1,350)
35,861,550
323,219
(429,539)
2,953,850
46,905
(2,150)
537,885 1,325,728
1,880

48,162,527
560,549 1,233,574

(433,039)
7,783,185
35,755,230
2,998,605
539,765 1,325,728
560,549 48,963,062
3,159,047
27,603,936
2,778,416
508,860
565,757
34,616,016
257,018
(45)
1,255,380
(419,493)
33,736
(2,150)
4,811

114,594

3,416,020
28,439,823
2,810,002
513,671
680,351
35,859,867
Net Book Value at

31st December 2014
4,367,165
7,315,407
188,603
26,094
645,377
560,549 13,103,195
At 1st January 2014
Depreciation for the financial
year

Company
Properties #
2013
RM
Plant Furniture
Capital
and
Office
and
Motor Work-inMachinery Equipment
Fittings Vehicles progress
RM
RM
RM
RM
RM
Total
RM
1,665,539
(421,688)
Total
RM
Cost
At 1st January 2013
Additions
7,248,657
234,857

37,337,998
290,056
(1,766,504)
2,924,607
62,342
(33,099)
532,085 1,230,358
5,800
256,800
(161,430)
49,273,705

849,855
(1,961,033)
7,483,514
35,861,550
2,953,850
537,885 1,325,728
48,162,527
2,934,374
28,084,610
2,768,685
500,293
626,229
34,914,191
224,673

1,259,435
(1,740,109)
40,922
(31,191)
8,567

100,958
(161,430)
1,634,555
(1,932,730)
3,159,047
27,603,936
2,778,416
508,860
565,757
34,616,016
Net Book Value at

31st December 2013
4,324,467
8,257,614
175,434
29,025
759,971
13,546,511
At 1st January 2013
Depreciation for the financial
year
55
Notes to the
4.

# Properties consist of: Freehold Leasehold

Land and
Land and
Company Buildings Buildings Renovation
Total
2014
RM RM RM RM
Cost
At 1st January 2014
Additions
132,515

6,835,010

515,989
301,021
(1,350)
7,483,514
301,021
(1,350)
132,515
6,835,010
815,660
7,783,185
At 1st January 2014

2,938,437
201,250

220,610
55,768
(45)
3,159,047
257,018
(45)
3,139,687
276,333
3,416,020
Net Book Value at

31st December 2014
132,515
3,695,323
539,327
4,367,165
Freehold Leasehold

Land and
Land and
Company Buildings Buildings Renovation
Total
2013
RM RM RM RM
Cost
At 1st January 2013
Additions
132,515

6,835,010

281,132
234,857
7,248,657
234,857
132,515
6,835,010
515,989
7,483,514
At 1st January 2013
2,737,185
201,252
197,189
23,421
2,934,374
224,673
2,938,437
220,610
3,159,047
132,515
3,896,573
295,379
4,324,467
Net Book Value at

31st December 2013
56
Notes to the
4.

(a)
The net book value of property, plant and equipment of the Group and of the Company includes the following
property, plant and equipment acquired under finance lease:-

Group
Company

2014 2013 2014 2013

RM
RM
RM
RM
(b)
5.
At Net Book Value

Motor vehicles
Plant and machinery

373,820
1,306,661
576,433
2,350,292
373,820
553,765
576,433
1,368,636
1,680,481
2,926,725
927,585
1,945,069
The leasehold building of the Group and of the Company with net book value of RM575,577/- (2013:
RM602,663/-) have been pledged to the licensed bank as security for banking facility granted to the Group
and the Company as disclosed in Note 11 to the financial statements.
PREPAID LAND LEASE PAYMENTS

Group
Company

2014 2013 2014 2013

RM
RM
RM
RM
Cost
At 1st January/31st December

1,698,290
1,698,290
838,460
838,460
Accumulated Amortisation
At 1st January

Charge for the year
(541,177)
(43,434)
(497,743)
(43,434)
(158,699)
(26,797)
(131,902)
(26,797)
At 31st December
(584,611)
(541,177)
(185,496)
(158,699)
1,113,679
1,157,113
652,964
679,761
Carrying amount at 31st December

Group
Company

2014 2013 2014 2013

RM
RM
RM
RM
Analysed as:Short-term prepaid land lease payments
Amount to be amortised
- Not later than one year
- Later than one year but not
later than five years
- Later than five years

1,113,679
1,157,113
652,964
679,761
43,434
43,434
26,797
26,797
173,736
896,509
173,736
939,943
107,188
518,979
107,188
545,776
Included in the prepaid land lease payments with net carrying amount of RM382,500/- (2013: RM400,500/-) have
been pledged to the licensed bank as security for banking facility granted to the Group and the Company.
57
Notes to the
6.
INVESTMENT IN SUBSIDIARY COMPANIES

2014
RM
Unquoted shares, at cost

Less: Accumulated impairment losses
10,414,671
(5,682,522)
10,414,671
(5,682,522)
4,732,149
4,732,149
The details of the subsidiary companies which have principal place of business and are all incorporated in Malaysia
are as follows:Name of Companies
Held by the Company
Effective Ownership
Interest/ Voting Rights
31.12.2014
31.12.2013
%
%
Principal Activities
Epro Industries Sdn. Bhd.
100
100
Property holding
Suria Merah Manufactory (Segamat) Sdn. Bhd.
100
100
Property holding
Hwa Tai Food Industries (Sabah) Sdn. Bhd.
100
100
Biscuit manufacturer
Hwa Tai Wholesale Sdn. Bhd.
100
100
Trading
Hwa Tai Manufacturing Sdn. Bhd.
100
100
Dormant
Acetai Corporation Sdn. Bhd. *
90
90
Trading
Hwa TaiImport Sdn. Bhd.*
100
100
Dormant
Hwa Tai (Sarawak) Sdn. Bhd. *
100
100
Dormant
Hwa Tai Distribution Sdn. Bhd. *
100
100
Trading
Hwa Tai Services Sdn. Bhd. *
100
100
Dormant
Absolute Focus Sdn. Bhd. *
100
100
Dormant
Anika Bebas Sdn. Bhd. *
100
100
Trading
Esprit Classic Sdn. Bhd. *
100
100
Trading
Held through Acetai Corporation Sdn. Bhd.
2013
RM
Subsidiary companies not audited by Baker Tilly Monteiro Heng.
58
Notes to the
7.
INVESTMENT IN AN ASSOCIATED COMPANY

Group
Company

2014 2013 2014 2013

RM
RM
RM
RM
Unquoted shares - at cost
Share of post acquisition losses
1,791,457
(161,113)
1,791,457
(158,242)
1,791,457

1,791,457

Exchange differences **
1,630,344
531,145
1,633,215

1,791,457

1,791,457
2,161,489
1,633,215
1,791,457
1,791,457
The details of the associated company which has principal place of business and is incorporated in the Peoples
Republic of China are as follows:Name of Company
Shan Dong Yingerle

Hwa Tai Food
Industry Co. Ltd.*
*

Issued
Share Capital
Chinese
Reminbi
(RMB)
10,500,000
Effective Ownership
Interest/ Voting Rights
2014
2013
%
%
48
48
Nature of the Relationship
Dealers, importers and exporters

of biscuit, cake and baby products
Associated company is not audited by Baker Tilly Monteiro Heng.
The summarised financial information of the associated company is as follows:

Assets and Liabilities
2014
RM
2013
RM
Current assets
Non-current assets
2,572,471
4,071,243
1,471,259
6,198,842
Total assets
6,643,714
7,670,101
Current liabilities
2,140,613
4,267,570
Total liabilities
2,140,613
4,267,570
Net assets
4,503,101
3,402,531
Results
Revenue
Loss after taxation
9,029,426
(5,982)
7,987,508
(256,648)
Groups share of net assets/

Carrying value of the Groups
interest in the associated company
2,161,489
1,633,215
The Groups share of loss for the financial year of the associated company is RM2,871/-.
**
Translation reserves are from translation of the financial statements of foreign associates and is not
distributable by way of dividends.
59
Notes to the
8. INVENTORIES

Group
Company

2014 2013 2014 2013

RM
RM
RM
RM
9.
At Cost
Work-in-progress
Finished goods
208,016
1,769,638
219,959
1,730,093
134,978
1,546,235
163,737
1,493,231
1,977,654
1,950,052
1,681,213
1,656,968
At Net Realisable Value

Raw materials
Packing materials
Consumable stores
1,359,531
1,355,125
207,502
1,303,835
1,699,879
221,820
1,164,273
1,202,819
155,871
1,136,093
1,507,598
178,985
2,922,158
3,225,534
2,522,963
2,822,676
4,899,812
5,175,586
4,204,176
4,479,644
TRADE AND OTHER RECEIVABLES

Group
Company

2014 2013 2014 2013

RM
RM
RM
RM
Current
Trade receivables
Trade receivables
Amount owing by subsidiary
companies
30,922,320
31,358,838
22,428,793
22,046,211
16,221,214
16,086,652

Less: Allowance for impairment
- Trade receivables
- Amount owing by subsidiary
companies
30,922,320
31,358,838
38,650,007
38,132,863
(6,964,724)
(7,339,770)
(2,114,745)
(2,036,723)
(16,040,044)
(16,040,044)
(6,964,724)
(7,339,770)
(18,154,789)
(18,076,767)
Trade receivables, net
23,957,596
24,019,068
20,495,218
20,056,096
60
Notes to the
9.
TRADE AND OTHER RECEIVABLES (Continued)

Group
Company

2014 2013 2014 2013

RM
RM
RM
RM
Other receivables
Other receivables
Amount owing by subsidiary
companies
Refundable deposits
441,614
520,898
47,308
122,030

78,317

95,957
3,759,463
55,277
2,349,155
48,917

- Other receivables
- Amount owing by subsidiary
companies
519,931
616,855
3,862,048
2,520,102
(11,846)
(11,846)
(53,393)
(53,393)
(11,846)
(11,846)
(53,393)
(53,393)
Other receivables, net
508,085
605,009
3,808,655
2,466,709
Total receivables
24,465,681
24,624,077
24,303,873
22,522,805
1,666,495
1,972,514
1,124,706
1,657,388
Total loans and receivables
26,132,176
26,596,591
25,428,579
24,180,193
Add: Cash and bank balances
Trade receivables are non-interest bearing and are generally on 14 to 90 days (2013: 14 to 90 days) terms. They
are recognised on their original invoice amount which represents their fair values on initial recognition.

The currencies exposure profile of trade and other receivables is as follows:

Group
Company

2014 2013 2014 2013

RM
RM
RM
RM
US Dollar (USD)
Singapore Dollar (SGD)
718,368
433,936
25,093
172,131
718,368
433,936
25,093
172,131
61
Notes to the
9.
Analysis on trade receivables
The ageing analysis of the Groups and the Companys trade receivables are as follows:-

Group
Company

2014 2013 2014 2013

RM
RM
RM
RM
Neither past due nor impaired
13,888,483
13,111,366
11,792,120
10,496,398
Past due 1 - 30 days

Past due 31 - 120 days
Past due more than 120 days

1,596,550
2,070,447
6,402,116
1,821,386
2,690,466
6,395,850
1,230,571
1,824,894
5,647,633
1,459,141
2,416,829
5,683,728

Impaired
10,069,113
6,964,724
10,907,702
7,339,770
8,703,098
18,154,789
9,559,698
18,076,767
30,922,320
31,358,838
38,650,007
38,132,863
Receivables that are neither past due nor impaired
Trade receivables that are neither past due nor impaired are creditworthy debtors with good payment records
with the Group.
Receivables that are past due but not impaired
The Group has not made any allowance for impairment for receivables that are past due but not impaired as
there has not been a significant change in the credit quality of these receivables and the amounts due are still
recoverable.
In determining the recoverability of a trade receivable, the Group considers any change in the credit quality of the
trade receivable from the date the credit was initially granted up to the reporting date. The Group has policies
in place to ensure that credit is extended only to customers with acceptable credit history and payment track
records. Allowances for impairment are made on specific trade receivable when there is objective evidence that
the Group will not able to collect the amounts due.
Receivables that are impaired
The Groups trade receivables that are individually impaired at the reporting date and the movement of the allowance
accounts used to record the impairment are as follows:-

Individually Impaired

Group
Company

2014 2013 2014 2013

RM
RM
RM
RM
Trade receivables:Nominal amounts

9,985,204
(6,964,724)
15,391,265
(7,339,770)
20,653,377
(18,154,789)
25,281,173
(18,076,767)
3,020,480
8,051,495
2,498,588
7,204,406
62
Notes to the
9.
Movements in impairment:-

Group
Company

2014 2013 2014 2013

RM
RM
RM
RM
At 1st January
Charge for the financial year

Written off
Reversal of impairment losses

7,339,770
357,184
(454,254)
(277,976)
8,279,024
227,612
(881,469)
(285,397)
18,076,767
357,184
(1,186)
(277,976)
18,123,765
188,399
(235,397)
At 31st December
6,964,724
7,339,770
18,154,789
18,076,767
Trade receivables that are individually determined to be impaired at the reporting date relate to debtors that have
defaulted on payments. These receivables are not secured by any collateral or credit enhancements.
Amount owing by subsidiary companies is unsecured, non-interest bearing, expected to be settled in cash and
is repayable on demand.
10.
SHARE CAPITAL
Group and Company

Number of ordinary shares
of RM1/- each
Amount

2014 2013 2014 2013

Unit
Unit
RM
RM
Authorised:
1,000,000,000 1,000,000,000
Issued and fully paid:

40,042,400
40,042,400
1,000,000,000 1,000,000,000
40,042,400
40,042,400
The holders of ordinary shares are entitled to receive dividends as declared from time to time, and are entitled to
one vote per share at meetings of the Company.
63
Notes to the
11.
LOANS AND BORROWINGS

Group
Company

2014 2013 2014 2013

RM
RM
RM
RM
Current
Finance lease liabilities (secured)

Floating rate bank loan (secured)

Floating rate bank loan (unsecured)

Bankers acceptances (unsecured)

Bank overdrafts (unsecured)
295,154
108,971

14,551,425
2,280,841
384,729
100,770
392,680
13,789,400
2,453,321
208,943
108,971

14,551,425
2,280,841
234,710
100,770
392,680
13,789,400
2,453,321
17,236,391
17,120,900
17,150,180
16,970,881
457,165
43,912
559,164
156,583
414,434
43,912
430,221
156,583
501,077
715,747
458,346
586,804
17,737,468
17,836,647
17,608,526
17,557,685
Non-current
Finance lease liabilities (secured)
Floating rate bank loan (secured)
Total loans and borrowings

(a)
Finance lease liabilities

Group
Company

2014 2013 2014 2013

RM
RM
RM
RM
Minimum lease payments
- On demand and within one year
- Later than one year but not later
than two years
- Later than two years but not later
than five years
336,152
435,481
243,209
269,104
218,764
283,468
188,155
190,525
276,901
327,463
261,930
281,883

Future interest charges
831,817
(79,498)
1,046,412
(102,519)
693,294
(69,917)
741,512
(76,581)
Present value of mininum

lease payments
752,319
943,893
623,377
664,931
64
Notes to the
11.
LOANS AND BORROWINGS (Continued)

(a)
Finance lease liabilities (Continued)

Represented by:-

Group
Company

2014 2013 2014 2013

RM
RM
RM
RM
Current
- On demand and within one year
295,154
384,729
208,943
234,710
Non-current
- Later than one year but not later
than two years
- Later than two years but not later
than five years
195,420
253,823
166,918
167,613
261,745
305,341
247,516
262,608
457,165
559,164
414,434
430,221
752,319
943,893
623,377
664,931
The effective interest rate ranges from 3.00% to 3.35% (2013: 3.00% to 4.75%) per annum. Interest rates
are fixed at the inception of the finance lease arrangements.
The finance lease liabilities are effectively secured on the rights of the assets under finance lease.
(b)
Loan and borrowings
The remaining maturities of the loans and borrowings (excluding finance lease liabilities) as at 31st December
2014 are as follows:-

Group
Company

2014 2013 2014 2013

RM
RM
RM
RM
On demand and within one year
Later than one year but not later
than two years
Later than two years but not later
than five years
16,941,237
16,736,171
16,941,237
16,736,171
43,912
108,680
43,912
108,680
47,903
47,903
16,985,149
16,892,754
16,985,149
16,892,754
Floating rate bank loan

The effective interest rate as at the reporting date is 7.85% (2013: 7.85% to 8.10%) per annum.
Effective interest rates as at reporting date is range from 4.38% to 6.24% (2013: 4.38% to 6.24%) per
annum.
Bankers acceptances
The bankers acceptances of the Group and the Company are granted on the undertaking that the Group
and the Company will not pledge or execute any charges on its assets, other than those assets under
finance lease.
65
Notes to the
11.
12.
LOANS AND BORROWINGS (Continued)

(b)
Loan and borrowings (Continued)
Bank overdrafts
The bank overdrafts of the Group and the Company are granted on the undertaking that the Group and
the Company will not pledge or execute any charges on its assets, other than those assets under finance
lease.
The effective interest rates as at the reporting date range from 7.85% to 9.10% (2013: 7.85% to 10.10%)
per annum.
TRADE AND OTHER PAYABLES

Group
Company

2014 2013 2014 2013

RM
RM
RM
RM
Current
Trade payables
Third parties
9,784,628
10,677,453
6,523,183
6,561,437
6,340,393
2,791,193
158,296
6,304,437
814,059
67,275
5,539,173
2,701,933
158,296
5,551,903
705,711
67,275
216,409
260,934
9,289,882
7,185,771
8,615,811
6,585,823
Total trade and other payables

Add: Loans and borrowings
(Note 11)
19,074,510
17,863,224
15,138,994
13,147,260
17,737,468
17,836,647
17,608,526
17,557,685
36,811,978
35,699,871
32,747,520
30,704,945
Other payables
Accrued operating expenses

Other payables
Refundable deposits
Amount owing to subsidiary
companies
Total financial liabilities

carried at amortised cost
The trade and other payables are non-interest bearing and are normally granted on 30 to 120 days (2013: 30 to
120 days) terms.
The amount owing to subsidiary companies is non-trade in nature, unsecured, non-interest bearing, expected to
be settled in cash and is repayable on demand.
Included in other payables is amount due to a director amounted to RM1,700,000/- (2013: Nil), which are nontrade in nature, unsecured, non interest bearing and repayable on demand.
66
Notes to the
13. REVENUE

Group
Company

2014 2013 2014 2013

RM
RM
RM
RM
Sales of trading goods
Sales of manufactured goods

15,197,263
46,134,337
17,772,195
48,027,091

48,384,347
51,451,517
61,331,600
65,799,286
48,384,347
51,451,517
14.
COST OF SALES
Cost of sales represents cost of inventories sold.
15.
FINANCE COSTS

Group
Company

2014 2013 2014 2013

RM
RM
RM
RM
Interest expenses
- trade financing
- bank overdrafts
- finance lease
- term loans
806,018
159,252
60,813
31,332
808,582
150,346
81,928
75,173
752,823
159,252
44,455
31,332
752,386
150,346
58,446
75,173
1,057,415
1,116,029
987,862
1,036,351
67
Notes to the
16.
(LOSS)/PROFIT BEFORE TAXATION
( Loss)/profit before taxation has been arrived at:-

Group
Company

2014 2013 2014 2013

RM
RM
RM
RM
After charging:Impairment loss
- trade receivables
- subsidiary companies
Amortisation of prepaid land lease
payments
Audit fee:
- current year
- under accrual in prior year
Bad debts written off
Directors remunerations
- salaries and allowances
- fees

- other emoluments
Allowance for a director of
a subsidiary company
Deposit written off
Depreciation of property,
plant and equipment
Hire of vehicles
Realised loss on foreign exchange
Loss on disposal of property
plant and equipment
Property, plant and equipment
written off
Rental of premises
Staff costs:
- salaries, wages and allowances

- bonus
- Employees Provident Fund
- SOCSO
- other staff related expenses
357,184

227,612

357,184

188,399
89,794
43,434
43,434
26,797
26,797
114,020
140
25,071
113,220
16,100
3,000
78,000

19,722
78,000
15,000
998,000
100,000
105,504
888,000
100,000
92,304
998,000
100,000
105,504
888,000
100,000
92,304
117,650

117,650
18,000
1,964,652
99,755
529
1,920,895
175,135
100
1,665,539
98,253

1,634,555
175,135
2,987
2,987
7,384
132,000
5,945
127,000
7,384
81,600
5,945
78,600
7,294,544
189,741
753,463
83,639
400,498
7,605,732
141,869
713,796
81,523
320,860
6,050,870
172,125
619,308
67,577
337,504
6,496,092
136,844
600,507
67,741
229,068
68
Notes to the
16.
(LOSS)/PROFIT BEFORE TAXATION (Continued)
(Loss)/profit before taxation has been arrived at: - (Continued)

Group
Company

2014 2013 2014 2013

RM
RM
RM
RM
And crediting:Impairment loss no longer required on
trade receivables
Interest income
Rental income
Gain on disposal of
property, plant and equipment
Gain on foreign exchange
- realised
- unrealised

277,976
8,411
3,600
285,397
14,126
3,600
277,976
8,219

235,397
13,964
32,533
32,533
295,616
157,782
380,731
32,265
295,616
157,782
380,731
32,265
(a) Directors remuneration

Details of Directors remuneration including the estimated monetary value of benefits-in-kind are as follows:-

Group and Company
2014 2013

RM
RM
Executive Director
Directors fees
Salaries
Allowances
Other emoluments
10,000
854,000
24,000
105,504
10,000
744,000
24,000
92,304
993,504
870,304
Non-Executive Directors
Directors fees
Allowances
90,000
120,000
90,000
120,000
210,000
210,000
Grand Total
Directors fees
Salaries
Allowances
Other emoluments
100,000
854,000
144,000
105,504
100,000
744,000
144,000
92,304
1,203,504
1,080,304
69
Notes to the
16.
(LOSS)/PROFIT BEFORE TAXATION (Continued)

(a) Directors remuneration (Continued)

The number of directors of the Company whose total remuneration fall within the respective ranges are as
follows:-

<--------------------- Number of Directors ------------------->

2014 2013

Non-
Non
Executive
Executive
Executive
Executive

Director
Director
Director
Director
Ranges of Remuneration (RM)
RM0 - RM50,000
RM100,001 - RM150,000
RM150,001 - RM200,000
RM300,001 - RM350,000
RM450,000 - RM500,000
RM850,000 - RM900,000
(b)
3
1

3
1
Key Management Personnel

Group
Company

2014 2013 2014 2013

RM
RM
RM
RM
Directors remuneration
(Note 16(a))
1,203,504
1,080,304
1,203,504
1,080,304
Other key management personnel

- salaries, bonus and other
emoluments
- Defined contribution plans
(Employees Provident Fund)
1,873,399
2,102,613
1,390,807
1,663,001
209,945
238,102
163,699
194,234
3,286,848
3,421,019
2,758,010
2,937,539
17. TAXATION

Group
Company

2014 2013 2014 2013

RM
RM
RM
RM
Income tax
- current year
- over/(under) provision in prior year
(64,000)
98,560
(290,000)
(41,545)
(64,000)
98,560
(290,000)
(58,178)
34,560
(331,545)
34,560
(348,178)
Income tax is calculated at the statutory rate of 25% of the estimated taxable profit for the year. In the Budget
Speech 2014, the Government announced that the corporate tax rate would be reduced to 24% from the current
years rate of 25% effective year of assessment 2016. Accordingly, the deferred tax was re-measured to reflect
these changes.
70
Notes to the
17.
TAXATION (Continued)
A reconciliation of income tax expense applicable to (loss)/profit before taxation at the statutory income tax rate
to income tax expense at the average effective income tax rate of the Group and Company are as follows:-

Group
Company

2014 2013 2014 2013

RM
RM
RM
RM
(2,469,659)
744,951
(1,344,096)
1,320,703
Tax at applicable tax rate of 25%

Tax effects arising from
- non-taxable income
- non-deductible expenses

- utilisation of deferred tax assets not
recognised in prior years.
- deferred tax assets not recognised
during the financial year
- effect of changes in tax rate

- over/(under) provision in prior year
617,415
(186,238)
336,024
(330,176)
344,140
(977,504)
67,400
(286,448)
230,871
(860,819)
43,808
(549,120)
156,733
220,726
562,763
(46,501)
(1,550)
98,560

(41,447)
(41,545)

9,198
98,560
(17,275)
(58,178)
34,560
(331,545)
34,560
(348,178)
Tax credit/(expense) for the financial year

Deferred tax assets have not been recognised for the following items:-

Group
Company

2014 2013 2014 2013

RM
RM
RM
RM
18.
Deductible temporary differences

Unabsorbed capital allowances

Unabsorbed reinvestment
allowances
Unutilised tax losses
17,202,459
2,038,684
17,563,038
1,148,429
17,874,165

18,154,565
3,235,656
20,232,262
3,813,088
19,990,751
2,480,783

3,120,078
42,709,061
42,515,306
20,354,948
21,274,643
Potential deferred tax assets

not recognised at 24% (2013: 24%)
10,250,175
10,203,673
4,885,188
5,105,914
(LOSS)/EARNINGS PER ORDINARY SHARE

(a)
Basic (loss)/earnings per ordinary share
The basic (loss)/earnings per ordinary share for the financial year has been calculated based on the Groups
(loss)/profit after taxation and non-controlling interests divided by the weighted average number of ordinary
shares in issue during the financial year.
Group
(Loss)/profit attributable to owners of the Company (RM)
(2,439,745)
401,572
Weighted average number of ordinary shares in issue
40,042,400
40,042,400
(Loss)/basic earnings per ordinary share (sen)
(6.09)
1.00
71
Notes to the
18.
(LOSS)/EARNINGS PER ORDINARY SHARE (Continued)

(b)
Diluted earnings per share
The Group has no potential dilutive of ordinary shares. As such, there is no dilution effect on the (loss)/
earnings per share of the Group.
19.
SIGNIFICANT RELATED PARTY TRANSACTIONS
In addition to the related party information disclosed elsewhere in the financial statements, the following significant
transactions between the Group and related parties took place at terms agreed between the parties during the
financial year:-

Group
Company

2014 2013 2014 2013

RM
RM
RM
RM
Transactions with subsidiary companies
Sales to subsidiary companies
- Hwa Tai Distribution Sdn. Bhd.
- Hwa Tai Wholesale Sdn. Bhd.
- Hwa Tai Food Industries (Sabah)
Sdn. Bhd.
- Acetai Corporation Sdn. Bhd.
7,223,657
250,491
7,881,357
184,209
124,354
175,501
107,059
159,440
3,600
1,200
13,200
3,600
1,200
13,200
1,200
1,200
13,200
13,200
Transactions with a firm in which

a director is a partner
Rental of premises paid to
Soo Thien Ming & Nashrah, a firm
in which a director is a partner
36,000
36,000
36,000
36,000
Legal and consultancy fees paid

to Soo Thien Ming & Nashrah,
a firm in which a director is a partner
350
13,870
350
12,000
Management fees, administration

fee and rental received/receivable
from subsidiary companies
- Hwa Tai Distribution Sdn. Bhd.
- Hwa Tai Wholesale Sdn. Bhd.
- Epro Industries Sdn. Bhd.
- Hwa Tai Food Industries (Sabah)
Sdn. Bhd.
- Suria Merah Manufactory (Segamat)
Sdn. Bhd.
72
Notes to the
20.
FINANCIAL GUARANTEE
Company
2014 2013

RM
RM
Unsecured
Corporate guarantees issued to financial institutions
for credit facilities granted to a subsidiary company
186,636
344,021
At the end of the reporting period, it was not probable that the counterparty to the financial guarantee contract
will claim under the contract. Consequently, the fair value of the financial guarantees is nil.
21.
CAPITAL COMMITMENT

Group
Company

2014 2013 2014 2013

RM
RM
RM
RM
Capital expenditure approved and
contracted for
- purchase of property, plant and
equipment
186,075
533,052
186,075
533,052
22.
SEGMENTAL INFORMATION
For management purposes, the Group is organised into operating units based on the nature of the business and
has two reportable operating segments as follow:(i) Manufacturing
(ii) Trading
Management monitors the operating results of its operating units separately for the purposes of making decisions
about resource allocation and performance assessment. Segment performance is evaluate based on profit or
loss before tax of each unit. Inter-segment transactions are entered in the ordinary course of business based on
terms mutually agreed upon by the parties concerned.
Segmental revenue and results

The accounting policies of the reportable segments are the same as the Groups accounting policies described
in Note 2. Segment results represents profit before tax of the segment. Inter-segment transactions are entered in
the ordinary course of business based on terms mutually agreed upon by the parties concerned.
Segment assets
Segment assets are measured based on all assets of the segment, excluding current tax assets.
Segment liabilities
Segment liabilities are measured based on all liabilities, excluding current tax liabilities.
(2,142,569)
578,636
(1,687,605)
928,381
931,510
991,281
(382,254) (281,193)
1,004,220) (1,059,833)
RESULTS

Segmental results

Other operating income

Other operating expenses

Finance cost (net)
53,908,340 56,359,156
46,134,337 48,027,091
7,774,003 8,332,065
REVENUE
External sales
Inter - segment sales
(210,141)
(170,701)
13,755

(53,195)
200,123
131,676
163,856
(39,213)
(56,196)
15,197,263 17,772,195
15,197,263 17,772,195

(116,949)
(116,949)

(123,602)
(123,602)

(2,469,659)
655,157
(1,975,255) 936,455
945,265 1,155,137
(382,254) (320,406)
(1,057,415) (1,116,029)

32,400 B
(32,400) B

69,105,603 74,131,351 7,774,003
89,794
32,400 B
(32,400) B
89,794

8,332,065
61,331,600 65,799,286

7,774,003 8,332,065 7,774,003 A 8,332,065 A
(2,469,659)
744,951
(1,942,855) 968,855
912,865 1,122,737
(382,254) (230,612)
(1,057,415) (1,116,029)
61,331,600 65,799,286
61,331,600 65,799,286

MANUFACTURING
TRADING
OTHERS
TOTAL
ELIMINATION
CONSOLIDATED
2014 2013 2014 2013 2014 2013 2014
2013 2014 2013 2014 2013
RM RM RM RM RM RM RM
RM RM RM RM RM
Business Segments
22. SEGMENTAL INFORMATION (Continued)
73
Notes to the
Total assets
Segmental liabilities
Total liabilities
Capital expenditure
Depreciation and amortisation
982,038
Inter-segment administrative fee are eliminated on consolidation
24,634
172,989
16,925
612,245
612,245
Inter-segment revenues are eliminated on consolidation
20,547
20,365
3,559,725
3,559,725
3,869,936
3,868,769
86,734
25,397
20,080
2,687,581
2,687,580
3,493,103
3,491,935
Nature of adjustments and eliminations to arrive at amounts reported in the consolidated financial statements
129,684
1,958,055 1,919,148
1,298,161
34,107,472 32,196,065
34,107,472 32,121,144
46,047,606 46,505,125
45,936,846 46,370,545
Note

Non cash expenditure other
than depreciation and
amortisation

Segmental assets
OTHER INFORMATION
15,300
24,634
175,066
19,002
644,661
644,661
129,684
102,034
2,008,086 1,964,329
1,318,241 1,002,403
36,968,042 35,930,856
36,811,977 35,699,871
50,152,954 51,019,722
50,041,026 50,883,975
129,684
102,034
2,008,086 1,964,329
1,318,241 1,002,403
36,968,042 35,930,856
36,811,977 35,699,871
50,152,954 51,019,722
50,041,026 50,883,975

MANUFACTURING
TRADING
OTHERS
TOTAL
ELIMINATION
CONSOLIDATED
2014 2013 2014 2013 2014 2013 2014
2013 2014 2013 2014 2013
RM RM RM RM RM RM RM
RM RM RM RM RM
74
Notes to the
75
Notes to the

Information about major customers

Revenue from 3 major customers amount to RM26,292,497/- (2013: RM27,248,497), arising from sales of
manufactured products.
23.
FAIR VALUE OF FINANCIAL INSTRUMENTS
The following are classes of financial instruments that are not carried at fair value and whose carrying amounts
are a reasonable approximation of their fair value:Note
Trade and other receivables (current)
Trade and other payables (current)
9
12
11
The Group classifies fair value measurements using a fair value hierarchy that reflects the significant of the inputs
used in making the measurement. The fair value hierarchy has the following levels:

Level 1 quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 inputs other than quoted prices included within Level 1 that are observable for the asset or liability,
either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3 inputs for the asset or liability that are not based on observable market data (unobservable inputs).
The carrying amounts of these financial assets and liabilities are a reasonable approximation of their fair values,
either due to their short term nature or that they are floating rate instruments that are re-priced to market interest
rates on or near the reporting date hence the fair value hierarchy is not presented.
The carrying amounts of the current portion of loans and borrowings are a reasonable approximation of their fair
values due to the insignificant impact of discounting.
The fair values of fixed rate loans and borrowings are estimated by discounting expected future cash flows at
market incremental lending rate for similar types of lending, borrowing or finance lease arrangements at the
reporting date.
24.
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The operations of the Group and of the Company are subject to a variety of financial risks, including credit risk,
liquidity risk, interest rate risk and foreign currency risk. The Group and the Company have formulated a financial
risk management framework whose principal objective is to minimise the Groups and the Companys exposure
to risks and/or costs associated with the financing, investing and operating activities of the Group and of the
Company.
(i)
Credit risk
Credit risk is the risk of loss that may arise on outstanding financial instruments should a counterparty
default on its obligations. The Groups and the Companys exposure to credit risk arises primarily from trade
and other receivables. For other financial assets (including cash and bank balances), the Group and the
Company minimise credit risk by dealing exclusively with high credit rating counterparties.
The Group and the Company does not hold any collateral as security and other credit enhancements for
the above financial assets.
76
Notes to the
24.
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (Continued)

(i)
Credit risk (Continued)
The management has a credit policy in place to monitor and minimise the exposure of default. The Group
trades only with recognised and credit worthy third parties. Trade receivables are monitored on an ongoing
basis.
At the reporting date, approximately 49% (2013: 51%) of the Groups trade receivables are due from 3 major
customers. The maximum exposure to credit risk for the Group is represented by the carrying amount of
each financial instrument.
Financial guarantee
The Company provides unsecured financial guarantees to banks in respect of banking facilities granted to
third parties.
The Company monitors on an ongoing basis the repayments made by the Company and their financial
performance.
The maximum exposure to credit risk amounts to RM186,636/- (2013: RM344,201) representing the
outstanding credit facilities guaranteed by the Company at the reporting date. At the reporting date, there
was no indication that the Company would default on its repayment.
Financial assets that are neither past due nor impaired

Information regarding trade and other receivables that are neither past due nor impaired is disclosed in
Note 9 to the financial statements. Deposits with banks that are neither past due nor impaired are placed
with reputable financial institutions with no history of default.
Financial assets that are either past due or impaired

Information regarding financial assets that are past due or impaired is disclosed in Note 9 to the financial
statements.
(ii)
Liquidity risk
Liquidity risk is the risk that the Group or the Company will not be able to meet its financial obligations as
they fall due. The Groups exposure to liquidity risk arises principally from its various payables, loans and
borrowings.
The Group maintains a level of cash and cash equivalents and bank facilities deemed adequate by the
management to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they
fall due.
Maturity analysis
The table below summarises the maturity profile of the Groups and the Companys assets and liabilities at
the reporting date based on contractual undiscounted repayment obligations.
77
Notes to the
24.

(ii)
Liquidity risk (Continued)

On demand

or within

one year
31st December 2014
RM
Group
One to
five years
RM
Total
RM
Financial assets
24,465,681
1,666,495
24,465,681
1,666,495
Total undiscounted financial assets
26,132,176
26,132,176
Financial liabilities
19,074,510
17,277,389

539,577
19,074,510
17,816,966
Total undiscounted financial liabilities
36,351,899
539,577
36,891,476

On demand

or within

one year
31st December 2014
RM
Company
One to
five years
RM
Total
RM
Financial assets
24,303,873
1,124,706
24,303,873
1,124,706
25,428,579
25,428,579
15,138,994
17,184,446

493,997
15,138,994
17,678,443
32,323,440
32,817,437
78
Notes to the
24.

(ii)
Liquidity risk (Continued)
Maturity analysis
The table below summarises the maturity profile of the Groups and the Companys assets and liabilities at
the reporting date based on contractual undiscounted repayment obligations.

On demand

or within

one year
31st December 2013
RM
Group
One to
five years
RM
Total
RM
Financial assets
24,624,077
1,972,514
24,624,077
1,972,514
26,596,591
26,596,591
17,863,224
17,171,652

767,514
17,863,224
17,939,166
35,034,876
767,514
35,802,390

On demand

or within

one year
31st December 2013
RM
Company
One to
five years
RM
Total
RM
Financial assets
22,522,805
1,657,388
22,522,805
1,657,388
24,180,193
24,180,193
13,147,260
17,005,275

628,991
13,147,260
17,634,266
30,152,535
628,991
30,781,526
(iii)
Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of the Groups and the Companys financial
instruments will fluctuate because of changes in market interest rates.
The Groups and the Companys exposure to interest rate risk arises primarily from their loans and borrowings.
The Group and the Company do not manage the net exposure to interest rate risk since they consider that
the cost to manage such instruments outweigh the potential risk of interest rate fluctuation.
The information on maturity dates and effective interest rate of financial assets and liabilities are disclosed
in their respective notes.
79
Notes to the
24. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (Continued)

(iii) Interest rate risk (Continued)

Sensitivity analysis for interest rate risk
Fair value sensitivity analysis for fixed rate instruments
The Group and the Company do not account for any fixed rate financial assets at fair value through profit
or loss and equity. Therefore a change in interest rates at the reporting date would not affect profit or loss
and equity.
Cash flows sensitivity analysis for variable rate instruments
A change of 100 basis points (bp) in interest rates at the reporting date would have increased/(decreased)
profit or loss and equity by the amounts shown below. This analysis assumes that all other variables, in
particular foreign currency rates, remain constant.

Profit or loss and Equity
2014
2013

Group
100bp
Increase
RM
100bp
Decrease
RM
100bp
Increase
RM
100bp
Decrease
RM
Variable rate instruments
(169,851)
169,851
(168,928)
168,928
(169,851)
169,851
(168,928)
168,928
Company
Variable rate instruments
(iv)
Foreign currency risk
Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate
because of changes in foreign exchange rates.
The Group has transactional currency exposures arising from sales or purchases that are denominated in a
currency other than the respective functional currency of Group entities, primarily Ringgit Malaysia (RM). The
foreign currency in which these transactions are denominated are mainly US Dollar (USD) and Singapore
Dollar (SGD).
The Group and the Company ensure that the net exposure to this risk is kept to an acceptable level by
buying or selling foreign currencies at spot rates where necessary to address short-term imbalances.
Management does not enter into currency hedging transactions since it considers that the cost of such
instruments outweigh the potential risk of exchange rate fluctuations.
80
Notes to the
24.

(iv)
Foreign currency risk (Continued)
Sensitivity analysis for foreign currency risk
A 10% strengthening of the USD and SGD against the RM at the end of the financial year would have
increased/(decreased) profit or loss and equity by the amounts shown below. This analysis assumes that
all other variable, in particular interest rates, remain constant.

2014
RM
2013
RM
USD
- strengthen 10%
- weakened 10%
86,917
(86,917)
15,318
(15,318)
SGD
- strengthen 10%
- weakened 10%
42,516
(42,516)
17,183
(17,183)
Effect of profit or loss and equity
25.
CAPITAL MANAGEMENT
The primary objective of the Groups capital management is to ensure that it maintains a strong capital base and
safeguard the Groups ability to continue as a going concern, so as to maintain investor, creditor and market
confidence and to sustain future development of the business. The directors monitor and determine to maintain
an optimal debt-to-equity ratio that complies with debt covenants and regulatory requirements.
During the financial year, the Groups strategy, which was unchanged from year 2013, was to maintain the debtto-equity ratio at an appropriate level. The debt-to-equity ratio is calculated as net debts divided by total capital
of the Group. The debt-to-equity ratios at 31st December 2014 and 31st December 2013 were as follows:-
2014
RM
2013
RM
Total liabilities
Equity attributable to owners of the Company
36,968,042
13,168,432
35,930,856
15,077,032
Debt-to-equity ratio
2.81
2.38
There were no changes in the Groups approach to capital management during the financial year.
81
Notes to the
26.
SIGNIFICANT SUBSEQUENT EVENT
The Companys following corporate exercise which had been approved by the Shareholders at the Extraordinary
General Meeting held on 12th November 2014 were fully completed on 14th April 2015.
(i)
The reduction of the issued and paid-up share capital of the Company pursuant to Section 64(1) of the
Companies Act, 1965, involving the cancellation of RM0.60 of the par value of each ordinary share of
RM1.00 in the Company was completed on 13th January 2015. As such, the par value of each existing
ordinary share in the Company has been reduced from RM1.00 to RM0.40 each;
(ii)
The amendment to the Memorandum of Association of the Company to facilitate the Par Value Reduction
was completed on 13th January 2015;
(iii)
The renounceable rights issue of up to 60,063,600 new shares of RM0.40 each at an issue price of RM0.40
per Rights Share on the basis of three (3) Rights Shares for every two (2) existing shares held after the Par
Value Reduction based on a minimum subscription level of 30,031,800 Rights Share was completed on
14th April 2015; and
(iv)
The exemption to Mr. Soo Thien Ming @ Soo Thien See and persons acting in concert with Mr. Soo from
the obligation to undertake a mandatory take-over offer to acquire all the remaining shares not already
owned by Mr. Soo upon completion of the Rights Issue pursuant to Practice Note 9, Paragraph 16.1 of the
Malaysian Code on Take-overs and Mergers 2010 was approved by the Securities Commission on 15th
December 2014.
The acceptance and excess applications received under the Rights Issue were 34,790,870 Rights Shares.
This represents an under-subscription of 25,272,730 Rights Shares or approximately 42.08% over the total of
60,063,600 Rights Shares available for subscription under the Rights Issue. Notwithstanding the under-subscription,
the minimum subscription level of 30,031,800 Rights Shares for the Rights Issues had been achieved and a total
of RM13,916,348/- was raised.
Arising from the corporate exercise, the latest issued and paid up share capital of the Company is RM29,933,308/comprising 74,833,270 ordinary shares of RM0.40 each.
82
SUPPLEMENTARY INFORMATION ON THE

BREAKDOWN OF REALISED AND UNREALISED
PROFITS OR LOSSES
On 25th March 2010, Bursa Malaysia Securities Berhad (Bursa Malaysia) issued a directive to all listed issuers pursuant
to Paragraphs 2.06 and 2.23 of Bursa Malaysia Main Market Listing Requirements. The directive requires all listed
issuers to disclose the breakdown of the retained profits or accumulated losses as at the end of the reporting period,
into realised and unrealised profits and losses.
On 20th December 2010, Bursa Malaysia further issued guidance on the disclosure and the format required.
Pursuant to the directive, the amounts of realised and unrealised profits or losses included in the accumulated losses
of the Group and the Company as at 31st December 2014 and 31st December 2013 are as follows:
Group
Company

2014 2013 2014 2013

RM
RM
RM
RM
Accumulated losses of the Group
and its subsidiaries:- realised
- unrealised
(27,401,782)
157,782
(24,839,391)
32,265
(22,564,339)
157,782
(21,129,286)
32,265
As at 31st December
(27,244,000)
(24,807,126)
(22,406,557)
(21,097,021)
Associate company
- realised
(161,113)
(158,242)
Total Group accumulated losses as

per statements of financial position
(27,405,113)
(24,965,368)
(22,406,557)
(21,097,021)
The determination of realised and unrealised profits is based on Guidance of Special Matter No. 1, Determination of
Realised and Unrealised Profits and Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad
Listing Requirements, issued by the Malaysian Institute of Accountants on 20th December 2010.
he disclosure of realised and unrealised profits or losses above is solely for complying with the disclosure requirements
T
stipulated in the directive of Bursa Malaysia and should not be applied for any other purposes.
83
STATEMENT BY
DIRECTORS
We, SOO THIEN MING @ SOO THIEN SEE and SOO CHUNG YEE, being two of the directors of Hwa Tai Industries
Berhad, do hereby state that, in the opinion of the directors, the financial statements set out on pages 25 to 81 are
drawn up so as to give a true and fair view of the state of affairs of the Group and of the Company as at 31st December
2014 and of the financial performance and cash flows of the Group and of the Company for the financial year ended on
that date in accordance with the Malaysian Financial Reporting Standards, International Financial Reporting Standards
and the requirements of the Companies Act, 1965 in Malaysia.
The supplementary information set out on Page 82 have been prepared in accordance with the Guidance of Special
Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa
Malaysia Securities Berhad Listing Requirements, issued by the Malaysian Institute of Accountants.
On behalf of the Board,

Director
SOO CHUNG YEE

Director
Kuala Lumpur
STATUTORY
DECLARATION
I, LEE KIM HONG, being the officer primarily responsible for the financial management of Hwa Tai Industries Berhad,
do solemnly and sincerely declare that to the best of my knowledge and belief, the financial statements set out on
pages 25 to 81, and the supplementary information set out on page 82 are correct, and I make this solemn declaration
conscientiously believing the same to be true, and by virtue of the provisions of the Statutory Declarations Act, l960.
LEE KIM HONG

Subscribed and solemnly declared by the abovenamed at Kuala Lumpur in the Federal Territory on 23rd April 2015.
Before me,
ZULKLIFA MOHD DAHLIM (W541)

Commissioner for Oaths
84
INDEPENDENT
AUDITORS REPORT
To the members of Hwa Tai Industries Berhad (Incorporated in Malaysia)
Report on the Financial Statements

We have audited the financial statements of Hwa Tai Industries Berhad, which comprise the statements of financial
position as at 31st December 2014 of the Group and of the Company, and the statements of profit or loss and other
comprehensive income, statements of changes in equity and statements of cash flows of the Group and of the Company
for the financial year then ended, and a summary of significant accounting policies and other explanatory information,
as set out on pages 25 to 81.
Directors Responsibility for the Financial Statements
The directors of the Company are responsible for the preparation of financial statements so as to give a true and fair
view in accordance with the Malaysian Financial Reporting Standards, International Financial Reporting Standards and
the requirements of the Companies Act, 1965 in Malaysia. The directors are also responsible for such internal controls
as the directors determine are necessary to enable the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
Auditors Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit
in accordance with approved standards on auditing in Malaysia. Those standards require that we comply with ethical
requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements
are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial
statements. The procedures selected depend on our judgement, including the assessment of risks of material
misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider
internal controls relevant to the Companys preparation of financial statements that give a true and fair view in order to
design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on
the effectiveness of the Companys internal controls. An audit also includes evaluating the appropriateness of accounting
policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall
presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the financial statements give a true and fair view of the financial position of the Group and of the Company as
at 31st December 2014 and of their financial performance and cash flows for the financial year then ended in accordance
with the Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of
the Companies Act, 1965 in Malaysia.
85
Independent
Auditors Report (contd)
To the members of Hwa Tai Industries Berhad (Incorporated in Malaysia)
Report on other Legal and Regulatory Requirements

In accordance with the requirements of the Companies Act, 1965 in Malaysia, we also report the following:(a)
In our opinion, the accounting and other records and the registers required by the Companies Act, 1965 in Malaysia
to be kept by the Company and its subsidiaries of which we have acted as auditors have been properly kept in
accordance with the provisions of the Companies Act, 1965 in Malaysia.
(b)
We have considered the financial statements and the auditors reports of the subsidiaries of which we have not
acted as auditors, which are indicated in Note 6 to the financial statements.
(c)
We are satisfied that the financial statements of the subsidiaries that have been consolidated with the Companys
financial statements are in form and content appropriate and proper for the purposes of the preparation of the
financial statements of the Group and we have received satisfactory information and explanations required by us
for those purposes.
(d)
The auditors reports on the financial statements of the subsidiaries did not contain any qualification, or any adverse
comment made under Section 174(3) of the Companies Act, 1965 in Malaysia.
Other Reporting Responsibilities

The supplementary information set out on page 82 is disclosed to meet the requirement of Bursa Malaysia Securities
Berhad and is not part of the financial statements. The directors are responsible for the preparation of the supplementary
information in accordance with the Guidance on Special Matter No.1, Determination of Realised and Unrealised Profits
or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued
by the Malaysian Institute of Accountants (MIA Guidance) and the directive of Bursa Malaysia Securities Berhad. In
our opinion, the supplementary information is prepared, in all material respects, in accordance with the MIA Guidance
and the directive of Bursa Malaysia Securities Berhad.
Other Matters
This report is made solely to the members of the Company, as a body, in accordance with Section 174 of the Companies
Act, 1965 in Malaysia and for no other purpose. We do not assume responsibility to any other person for the contents
of this report.
Baker Tilly Monteiro Heng

No. AF 0117
Chartered Accountants
Kuala Lumpur
Ong Teng Yan

No. 3076/07/15(J)
Chartered Accountant
86
Analysis of
Shareholdings
As at 30 April 2015
Class of securities
:
Authorised share capital
:
Issued and fully paid-up share capital
:
Voting rights
:

Ordinary shares of RM1/- each fully paid.

RM1,000,000,000/RM29,933,308/Registered shareholders are entitled to one vote per
ordinary share held at all general meetings.
SIZE OF SHAREHOLDINGS

Range of
No. of
Shareholdings Shareholders
% of
Shareholders
No. of
Shares
% of
Shareholdings
4.35
22.38
54.80
16.80
1.60
0.07
2,488
569,873
7,209,790
13,830,252
22,271,300
30,949,567
0.01
0.76
9.63
18.48
29.76
41.36
Less than 100

100 - 1,000
1,001 - 10,000
10,001 - 100,000
100,001 - less than 5% of issued shares
5% and above of issued shares
128
658
1,611
494
47
2
Total
2,940
100.00 74,833,270
100.00
THIRTY LARGEST SHAREHOLDERS

Name of Shareholders as per Register of Members
No. of
Shares
% of
Shareholdings
1.
Soo Thien Ming @ Soo Thien See (A/C 1)
19,962,092
26.68
2.

Public Nominees (Tempatan) Sdn Bhd

(A/C Soo Thien Ming @ Soo Thien See)
9,635,975
12.88
3.
Teh Leong Kok
3,143,000
4.20
4.

Kenanga Nominees (Tempatan) Sdn Bhd

(A/C Gan Boon Guat)
2,500,000
3.34
5.

HLB Nominees (Tempatan) Sdn Bhd

(A/C Heng Yong Kang @ Wang Yong Kang)
2,000,000
2.67
6.
Lanjut Bestari Sdn Bhd
1,434,750
1.92
7.
Soo Thien Ming @ Soo Thien See (A/C 2)
1,284,000
1.72
8.
Yam Lai Mun
1,214,500
1.62
9.
Lai Thiam Poh
1,007,100
1.35
10.

Alliancegroup Nominees (Tempatan) Sdn Bhd

(A/C Heng Yong Kang @ Wang Yong Kang)
1,000,000
1.34
11.
Rosnan Bin Mahat
850,050
1.14
12.
Teo Kwee Hock
611,900
0.82
13.

Alliancegroup Nominees (Tempatan) Sdn Bhd

(A/C Tan Pow Choo @ Wong Seng Eng)
583,900
0.78
14.

Public Nominees (Tempatan) Sdn Bhd

(A/C Ung Bok @ Hoong Thean Sooi)
553,900
0.74
15.
Lim Poh Fong
400,400
0.54
16.
Lee Bee Geok
400,000
0.53
17.
Bijak Tulus Sdn Bhd
380,800
0.51
18.
Siah Leong Hoe
377,000
0.50
87
Analysis of
Shareholdings (contd)
As at 30 April 2015
THIRTY LARGEST SHAREHOLDERS (Continued)

Name of Shareholders as per Register of Members
No. of
Shares
% of
Shareholdings
19.
Ng Ah Poh
334,100
0.45
20.
Bek Thiam Hong
257,000
0.34
21.
Kenanga Nominees (Tempatan) Sdn Bhd (A/C Ling Chua Hua)
250,000
0.33
22.
Lee Sau Kwang
250,000
0.33
23.
JF Apex Nominees (Tempatan) Sdn Bhd (A/C Teo Siew Lai)
237,100
0.32
24.
Thong Foo Ching @ Thong Chuan Ching
220,800
0.30
25.
Tan Leok Kwee
216,500
0.29
26.
CIMSEC Nominees (Tempatan) Sdn Bhd (A/C Noor Syaziah Binti Salim)
215,400
0.29
27.
Ooi Phuay Gim
201,700
0.27
28.
Lowe Teck Huat
200,000
0.27
29.
Te Yang Lee Sing @ Thian Lee Sing
200,000
0.27
30.
Tan Tiong Cheng
179,000
0.24
Total
50,100,967
66.98
SUBSTANTIAL SHAREHOLDERS
According to the Register of Substantial Shareholders required to be kept under Section 69L of the Companies Act,
1965, the following are the substantial shareholders of the Company:
Name of
Substantial Shareholder

Soo Thien Ming @
Soo Thien See
Direct
Interest
%
(A)
30,949,567
41.36
Indirect
Interest
%
(B)

Total
Interest
(A) + (B)
30,949,567
41.36
DIRECTORS SHAREHOLDINGS
According to the registers required to be kept under Section 134 of the Companies Act, 1965, the directors interest in
the ordinary shares of the Company are as follows:Name of
Director

Soo Thien Ming @
Soo Thien See

Direct
Interest
%
(A)
Indirect
Interest
%
(B)
Total
Interest
(A) + (B)
30,949,567
41.36
30,949,567
41.36
50,000
0.07
50,000
0.07
Soo Thien Ming @ Soo Thien See is deemed to have an interest in the equity holdings held by the Company in its
subsidiaries by virtue of his controlling interest in the Company.
Other than as disclosed above, none of the other directors hold any share in the Company or its related companies.
88
List of
Group Properties
As at 31 December 2014
Location
Land
Area
(Sq.ft.)
Build
up Area
(Sq.ft.)
Tenure
Lot No. PTD 1098 &

& PTD 1099 at Mukim
Linau, Tongkang Pecah
Industrial Estate,
District of Batu Pahat,
Johor Darul Takzim
87,120
56,150
Leasehold
Lot No. PTD 1731

at Mukim Linau, Tongkang
Pecah Industrial Estate,
Johor Darul Takzim
43,560
23,745
Lot No. PTD 1171

Johor Darul Takzim
43,560
Lot No. PTD 881

Johor Darul Takzim
Description
Date of
Acquisition/
Revaluation
(Year)
Date of
Expiry
(Year)
Estimated
Age of
Building
(Years)
Net
Book
Value
(RM000)
Factory land &

Industrial buildings
(Own Occupation)
1983 (R)
2037
37
1,729
Leasehold
Factory land &

(Own Occupation)
1985 (R)
2039
32
198
19,670
Leasehold
Factory land &

(Own Occupation)
1978
2038
35
400
21,780
6,600
Leasehold
Factory land &

(Own Occupation)
1991
2035
35
237
Lot No. PTD 1007

Johor Darul Takzim
21,775
15,923
Leasehold
Factory land &

(Own Occupation)
2011
2036
Not
available
958
Lot No. PTD 7028 &

7029 at Mukim Linau,
Johor Darul Takzim
1,540
(per unit)
1,540
(per unit)
Freehold
2 units single storey

terrace houses
(Own Occupation)
1991
22
133
Lot No. PTD 80369

1 Jalan Impian Ria 6,
Taman Impian Ria,
Skudai,
Johor Darul Takzim
7,476
1,592
Leasehold
1 unit 2 storey
corner house
(Vacant)
2006
2097
17
428
Lot No. PTD 40 & 41

Lok Kawi Light Industrial
Estate,
District of Kota Kinabalu,
Sabah
121,908
49,237
Leasehold
Factory land &

(Own Occupation)
1989
2042
23
2,177
FORM OF PROXY
I / We,................................................................................................................................................................................
of........................................................................................................................................................................................
being a member of HWA TAI INDUSTRIES BERHAD, hereby appoint.................................................................................
of........................................................................................................................................................................................
or failing him/her.................................................................................................................................................................
of........................................................................................................................................................................................
or failing him / her the Chairman of the Meeting, as my / our proxy, to vote for me / us and on my / our behalf at the Fortieth
Annual General Meeting of the Company to be held on 20 June 2015 and at any adjournment thereof in the manner indicated
below in respect of the following Resolutions:Agenda
1.
To present the Audited Financial Statements for the financial year ended 31 December 2014 together with the
Directors and Auditors Reports thereon.
Resolutions relating to:

2.
The payment of Directors fees
3.
The re-appointment of Director, YBhg. Col. (Rtd.) Dato Ir. Cheng Wah
4.
The re-election of Director, Soo Chung Yee
5.
The re-election of Independent Directors:

YBhg. Col. (Rtd.) Dato Ir. Cheng Wah
For
Against
En. Mohamed Razif Bin Tan Sri Abdul Aziz

Mr. Soo Wei Chian
6.
Appointment of Auditors and their remuneration
7.
Ordinary Resolution Authority to allot and issue shares in general pursuant to Section
132D of the Companies Act, 1965
Please indicate with (X) how you wish your vote to be cast.
No. of Shares Held
Date:........................................... Signature:..........................................................
NOTES:
(1)
A member of the Company entitled to attend and vote at the meeting is entitled to appoint at least 1 proxy to attend and vote in his
stead. A proxy need not be a member of the Company.
(2)
Where a member appoints 2 or more proxies, the appointments shall be invalid unless he specifies the proportion of his shareholdings
to be represented by each proxy.
(3)
Where a member is an authorised nominee as defined under the Securities Industry (Central Depositories) Act, 1991, it may appoint
at least 1 proxy in respect of each securities account it holds with ordinary shares of the Company standing to the credit of such
securities account.
(4)
The instrument appointing a proxy shall be in writing under the hand of the appointor or of his attorney duly authorised in writing or,
if the appointor is a corporation, either under its Common Seal or signed by an officer or attorney so authorised.
(5)
The instrument appointing a proxy must be deposited at the Registered Office of the Company at No. 12, Jalan Jorak, Kawasan
Perindustrian Tongkang Pecah, 83010 Batu Pahat, Johor Darul Takzim, Malaysia not less than 48 hours before the time set for
holding the meeting or any adjournment thereof.
Please fold this flap for sealing
Please fold here
Postage
THE SECRETARY
HWA TAI INDUSTRIES BERHAD
NO. 12 JALAN JORAK

KAWASAN PERINDUSTRIAN TONGKANG PECAH
83010 BATU PAHAT
JOHOR DARUL TAKZIM
MALAYSIA
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Notice of Annual General Meeting 2

To appoint Auditors and authorise the Directors to fix their remuneration.

By Order of the Board

HWA TAI INDUSTRIES BERHAD I Annual Report 2014

Statement Accompanying Notice Of Annual General Meeting

Jessica Chin Teng Li (MAICSA 7003181)

Baker Tilly Monteiro Heng

REGISTERED OFFICE &

HWA TAI INDUSTRIES BERHAD I Annual Report 2014

Non-Independent Non-Executive Director

MR. SOO CHUNG YEE

Non-Independent Executive Director

YBHG. COL. (RTD.) DATO IR. CHENG WAH

ENCIK MOHAMED RAZIF BIN TAN SRI ABDUL AZIZ

MR. SOO WEI CHIAN

Number of Meetings Attended

Soo Thien Ming @ Soo Thien See

Soo Chung Yee

Col. (Rtd.) Dato Ir. Cheng Wah

Mohamed Razif Bin Tan Sri Abdul Aziz

Soo Wei Chian

HWA TAI INDUSTRIES BERHAD I Annual Report 2014

COMPOSITION OF AUDIT COMMITTEE

Col. (Rtd.) Dato Ir. Cheng Wah (Chairman)

Independent Non-Executive Director

Mohamed Razif Bin Tan Sri Abdul Aziz

Independent Non-Executive Director

Soo Wei Chian *

Independent Non-Executive Director

* A member of the Malaysian Institute of Accountants

TERMS OF REFERENCE OF AUDIT COMMITTEE

The Audit Committee must be composed of no fewer than 3 Members;

Meetings shall be held not less than 4 times a year.

The Company Secretary shall be the secretary of the Audit Committee.

Investigate any activity within its terms of reference.

HWA TAI INDUSTRIES BERHAD I Annual Report 2014

To recommend the nomination of a person or persons as External Auditors.

AUDIT COMMITTEE MEETING

Col. (Rtd.) Dato Ir. Cheng Wah (Chairman)

Mohamed Razif Bin Tan Sri Abdul Aziz

Soo Wei Chian

ACTIVITIES OF THE AUDIT COMMITTEE

Mapping of the current state of procedures and process.

HWA TAI INDUSTRIES BERHAD I Annual Report 2014

Composition and Board Balance.

Board Meetings and Supply of Information.

Number of Meetings Attended

Soo Thien Ming @ Soo Thien See

Soo Chung Yee

Col. (Rtd.) Dato Ir. Cheng Wah

Mohamed Razif Bin Tan Sri Abdul Aziz

Soo Wei Chian

Appointments to the Board.

HWA TAI INDUSTRIES BERHAD I Annual Report 2014

Market Outlook for 2014.

Annual General Meeting

HWA TAI INDUSTRIES BERHAD I Annual Report 2014

HWA TAI INDUSTRIES BERHAD I Annual Report 2014

Utilisation of Proceeds raised from Corporate Proposals

HWA TAI INDUSTRIES BERHAD I Annual Report 2014

Business Environment in 2014